What is the bridging loan process?
The process for obtaining a bridging loan can vary depending on the lender and the specific loan product. However, here are some of the typical steps involved in the process:
- Initial application: The borrower submits an initial application for the loan, which typically includes basic information such as the purpose of the loan, the loan amount, and the collateral used to secure the loan.
- Valuation: The lender will typically conduct a valuation of the collateral to determine the asset’s value used to secure the loan. This may involve a physical inspection of the property or other support.
- Underwriting: The lender will review the borrower’s application and conduct a credit check to assess the borrower’s ability to repay the loan. The lender may also require additional documentation, such as bank statements or proof of income.
- Offer: If the loan is approved, the lender will provide the borrower with an offer letter, which sets out the terms and conditions of the loan, including the loan amount, interest rate, fees, and repayment terms.
- Legal process: The legal process begins once the borrower accepts the offer. This typically involves the borrower’s solicitor reviewing and approving the loan documentation, including the loan agreement and any security documents.
- Disbursement: The lender will disburse the funds to the borrower once the legal process is complete. Depending on the loan terms, the funds may be paid in a lump sum or instalments.
- Repayment: The borrower is responsible for repaying the loan according to the agreed-upon terms. This may involve making monthly interest payments or repaying the total loan amount plus interest at the end of the loan term.
It’s essential for borrowers to carefully consider the terms and conditions of the loan and work with a reputable lender or broker who can provide clear and transparent information about the loan process. Before taking out a bridging loan, borrowers should also carefully consider their ability to repay the loan, including all costs and fees.
How can Sterling Commercial Finance Help?
At Sterling Commercial Finance, we’ve been helping businesses access funding for over 20 years. Get in touch with the team today to see how we can help your business.