When it comes to commercial bridging finance, speed is of the essence.
Instead of taking months, a bridging loan can see funds in your account in days, making it a great way to secure funds for property purchases at auction, development opportunities and refinance for existing loans.
Lending only our own money (rather than that of other lenders) which is secured against borrowers’ commercial property, means we can make a decision within hours. All too often, however, a deal can be significantly delayed due to the lack of correct documentation and due diligence on the borrower’s part, particularly when it comes to first time borrowers.
We asked our trusted legal partner, solicitor Cathy Thomas of Mason Thomas Law, a property law specialist based in Sheffield, what borrowers can do to ensure their loan application proceeds quickly and without any hold-ups.
Cathy explained: “First time borrowers are often not aware of the documentation they need to provide once their application reaches the legal stage, and getting this information can be a real stumbling block that can lead to a delay in completing their financing exercise.”
Here, Cathy gives advice to borrowers to avoid delays when it comes to the commercial bridging loan process.
- Instruct a commercial property solicitor with bridging loan experience – A solicitor who specialises in not only commercial property but also bridging finance will significantly speed up the process as they know exactly what is required. The very nature of bridging finance means that everything needs to come together and complete extremely quickly, so your solicitor will need the skills, speed and knowledge in order to assist. Don’t let your bridging loan deal be their learning curve!
- Speak to existing lenders – If you have loans with other lenders secured on the property, have detailed discussions with them ahead of making the loan application to ensure you know exactly what they will require to facilitate the release of their security.
- Property title deeds – Do any third parties have a restriction registered against the title to the property that will need to provide a consent to allow the financing transaction to proceed? It is imperative to be in touch with any such third party as early on in the process as possible, to ensure that completion won’t be delayed due to a delayed consent.
- Due diligence – Ensure you can provide all the necessary certificates and approvals for the building, for example energy performance certificates, planning permission, building regulations approval and certification, fire risk assessment, asbestos report, electrical safety certificates etc. Without these to hand, there will be significant delays if you have to obtain them, particularly when it comes to retrospective planning permission!
- Valid ID – You will be asked to supply photographic ID (e.g. a passport or driving licence) as part of your loan application. If you have moved house or not been abroad recently, you will need to ensure that your ID is up-to-date.
Cathy added: “These are five common reasons I see time and time again for bridging loan transactions stalling, making it stressful and time consuming for everyone concerned.”
“If borrowers gather all the information ahead of making the application and complete their own due diligence on the property they are securing against the loan, this puts them in the best position possible to achieve drawdown of their loan quickly.”
If you’re a broker representing a first-time borrower looking for short term commercial finance, speak to a member of Bridge Help’s team today. Our Business Development Team can take you through the entire application process, providing support at every stage of your journey with us.