How to use bridging finance

Richard Butler Creagh On Bridging Finance

Welcome to the Richard Butler Creagh blog. Richard Butler Creagh is a financial consultant providing clients with specialized financial, property and investment guidance. In today’s blog, we’re talking about what bridging finance is. Read on to find out more.

Bridging financing is a great way to provide our company with financial liquidity at a difficult time between the start of an investment and the reimbursement of its costs or obtaining a payment The use of this form of assistance can significantly reduce the risk of company bankruptcy, which is why this form of support is very popular among entrepreneurs.

Bridging financing allows you to maintain financial liquidity in the period between covering the project implementation costs and their reimbursement, allows for patching the budget hole, ensures continuity of investment financing and funds for current expenses of the enterprise. By undertaking this type of commitment, we significantly reduce the risk of losing financial liquidity at the time of large expenditures on selected investments.

Investing in innovation and improving the company’s services is an indispensable task for every entrepreneur. It is in this way that he can provide his brand with a competitive advantage, strengthen its position on the market or gain the trust of customers. Unfortunately, investing almost always means considerable expenses that can undermine a delicate financial balance of the company – at that moment, bridging financing comes to our aid.

Bridging financing is a type of commitment that allows our company to obtain the funds necessary to maintain financial balance. We reach for such a solution especially when we undertake investments that require large financial outlays. Even if the invested funds are to be refunded to us, the process of receiving the necessary money may drag on and thus expose the company to financial difficulties. Bridging financing allows us to avoid this because it ensures financial stability even when large investment costs are incurred. In this way, we can devote additional cash, gained through bridging financing, to current expenses when we spend our own funds on a specific investment goal.

The market offers a wide variety of opportunities to take advantage of bridging support. Most often it takes the form of bridging loans, advances granted from the entity reimbursement of a given investment, bridging loans and loans granted by other entrepreneurs. Choosing the right commitment is a very important issue that can affect the fate of our company. When making decisions, one should take into account the credibility and reliability of the company in which we want to obtain financial support, and then compare its terms with the offers of other lenders. It is also worth considering a few different offers and choosing the one most suitable for the financial situation of our company. The obligation that will help us to keep our financial liquidity in the face of large investment expenditures can be obtained at a bank, in a large enterprise or in a non-bank institution.

Bridging financing and non-bank market.  The non-banking sector more and more often sees its chance in offering not only financial obligations for individual clients but also loans adapted to the needs of entrepreneurs. For consumers, non-bank loans for companies are a great alternative to bank liabilities, mainly due to the limited amount of formalities and accelerated time to obtain access to cash, as well as a competitive price.

The number of non-bank offers is increasing all over the world, targeted at business owners who need financial support. The attitude of entrepreneurs to this type of solutions is also dynamically changing – initially, they approached them with reserve, but nowadays they are more willing to reach for this form of additional financing. Bridging loans are a great alternative for people who have been refused at the bank or lack of funds to complete their investments.

“We make sure our investors are protected so that no one project can affect another. The borrower gets protection on the basis that we don’t take anything on unless it has stood up to our due diligence process and is viable. We are rigorous but in the end everyone benefits. Our aim is to help all sides of the project thrive.” Richard Butler-Creagh, 2017

Richard Butler Creagh established Henley Finance in 2013, a short-term bridging finance company that specializes in loans.  Read more about Richard Butler Creagh on his official website and learn more about Bridging and Commercial app here. Connect with Richard Butler Creagh  Linkedin page here.

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What is Bridging Finance

Richard Butler Creagh Shares about Bridging Loans

 

Welcome to the Richard Butler Creagh blog. Richard Butler Creagh founded Henley Finance in 2013. a short-term bridging finance company that specializes in loans between three months to a year, of £100,000 to £1,000,000 for experts in property development.  Here we explain the basics of bridging finance loans. Read on to find out more.

Richard Butler Creagh

People who take out mortgage loans know the concept of bridging loan or bridging insurance, It is used to secure a liability to the bank or another secured creditor until the mortgage is established on the property. A mortgage loan for a mortgage of a house or flat, or even land. However, before the borrower formally registers a mortgage with the bank in the land registry he secures his interests through bridging insurance. A short term facility securing interest in the property

A bridging loan granted to entrepreneurs has a slightly different dimension. Namely, it is granted in the form of assistance in the implementation of the investment. Its aim is to secure investment and develop the property before it is ready to re-mortgage. Further, in Europe bridging finance is often used to secure European Union subsidies for projects.

The basic purpose of the bridging loan is to enable or facilitate the implementation of investments From the moment the beneficiary incurs the first expenses related to the project implementation until the moment the refund is received, he may use the own funds or just from the bank’s funds as part of the bridge loan. The loan may be granted on a one-off basis or in tranches, up to the amount of the subsidy granted. It helps in maintaining financial liquidity before the project is due and receiving a refund.

How to get a bridge loan? Depending on the lender that offers the bridging loan, other conditions may apply. The loan is usually granted on simplified terms and it is easier to obtain it then, for example, receiving a positive decision from the bank on your investment loan application for the company. As a rule of thumb, the only security for the bridging loan is the assignment of rights under the co-financing agreement with the attached blank promissory note of the borrower and the security vested in form of a mortgage.

When the bridging loan feasible? Bridging finance is one of the more expensive form of financing the project and at the same time, it is the most popular amongst new developers who might struggle with big lenders due to lack of investment history. The concept from the perspective of bridging company is to secure the loan with equity.  If the finance is 70% of the loan amount it should be feasible. However, one thing worth considering is that the interest is paid monthly and often one or two months of none payment will trigger default interest which will eat the equity very quickly. Therefore, it is worth considering the value of the project and rolling up the interest for a period of time. This has to be carefully planned as not only it will increase the initial debt but interest payments thereafter.

Richard Butler Creagh, founder of the Henley Finance offers fast, flexible solutions to your bridging requirements. The Henley Finance team has decades of entrepreneurial experience in the financial and real estate sectors. Read more about Richard Butler Creagh online here. Like  Richard Butler Creagh on our official Twitter page and keep up to date with the latest finance news. Join Richard Butler Creagh professional network on Linked here.

Watch this  Henley Finance video and see what they can offer you:

 

 

A Look into bridging finance

Richard Butler Creagh is a financial consultant who founded Henley Finance in 2013. Here’s an overview of bridging finance on how you can use it.

Bridging Finance is the answer when you want to purchase your new home before you have sold your existing home. It is a viable solution if you aren’t yet in a position to sell your current home, prior to buying your next.

richard butler creagh

 

How does it work?

Bridging loans can be secured through the equity you have in your existing home, the new home you want to purchase, or both. It is important to check the level of equity you have, to see if it is an option for you. Typically this will give you 6 to 12 months to sell your old home. During the bridging period, you usually make interest-only payments on your existing home and your new home, in addition to costs for the new purchase. Once you have sold your existing property, your payments will switch to principle and interest on the remaining debt left. Be aware that there can be repercussions of not selling within the set bridging period.

Capitalization

Alternatively, Bridging Finance can be provided through a new loan where no repayments are required for a set period of time. Although the new loan doesn’t require repayments during the bridging period, interest will be calculated and added on top of the loan. Whilst this interest is capitalizing, you will continue making the existing principle & interest payments on your current loan for you to be sold property.

When your current home has sold, and that loan has been paid off and closed, your broker can then renegotiate your new home’s loan terms on your behalf. It helps to get a good understanding of the options available to you so you know that you will be able to meet your financial obligations out of taking advantage of a bridge loan. Learn more about how you can get the most out of bridge financing by reading about Richard Butler Creagh online. Know more about Richard Butler Creagh through his Soundcloud page and read Richard Butler-Creagh news here.

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Uk House Prices Make Surprise 5.9% Rise In February

House prices rose by 5.9% in February – confounded many commentators, as it appears to contradict the widely held view that the UK’s property market remains in the grip of a slowdown.

Despite an escalation in Brexit confusion, property prices rose 3% percent last January, the latest Halifax index showed.

The Halifax said the 5.9% increase seen in February was thought to be the biggest it had ever recorded. It lifted the average property price to £236,800 – up from £223,629 at the end of January. That translates into a £470-a-day increase in value.

The big monthly rise lifted the annual rate of price growth to 2.8%, which the Halifax said was “fairly subdued” compared with 2015-16 when it was more than 8%. But with other surveys and official data mostly showing housing market, Halifax cautioned against reading too much into the strength of a single month’s figures.

Richard Butler-Creagh is the founder of Henley Finance. Learn more about how you can get the most out of a bridge financing by reading about Richard Butler Creagh online here. Read the recent news article about Richard Butler Creagh to their website. Show your support online by following Richard Butler Creagh on Twitter here. Watch this video about Henly Finance and what they can offer you:

How long does it take to get a Bridging Loan?

Bridging loans can be arranged within a matter of hours with funds released within 72 hours although usually this takes a bit longer and can take a couple of weeks. While a bridging loan may be arranged much quicker than could be achieved through a traditional bank, most bridging finance companies still apply sensible and relatively conservative lending criteria. Usually, such lenders are smaller nimble operations and specialise in doing all of the usual checks that a bank will do but without the encumbrance of bank bureaucracy.

Every bridging loan that’s arranged has an exit strategy agreed with the lender – the means by which you’re going to repay it. You might be planning to sell the property after renovations are complete, arrange a long-term mortgage on it or sell another property to pay off the loan.

Interest rates are quoted per month. After the first month minimum, interest is calculated daily. For example, you take out a £100,000 bridging loan on 1st August at 0.75% monthly. If you repay it on 6th October you pay one month’s interest (£750) plus 6 days’ interest (£148) = £898 in interest. (Plus the loan set-up fees.)

Fees include the usual search fees and land registration fees, the lender’s valuation fee (which you need to pay) and both your legal fees and the lender’s (which you may be able to minimize by using the lender’s solicitor to do your own legal work as well). Then there’s the lender’s arrangement or facility fee of around 2% and your broker’s fee (which will be least of all the professional fees).

This is a very useful form of finance for the property.

If you’re looking for short term finance and are a property owner, a bridging loan could help. Contact Richard Butler Creagh to discover your options here. Connect with Richard Butler Creagh on Crunchbase and join our network. Follow Richard Butler Creagh on our official Twitter page for more advice on bridging loans.

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The Ultimate Guide to Bridging Loans

A bridging loan is a type of short-term finance that typically lasts for 12 months or less. It provides fast and flexible funding for all kinds of purposes and is used by individuals, investors, businesses and property developers

What are bridging loans used for? Bridging finance was traditionally used to ‘bridge’ gaps in property chains, but today it is more widely used. Homebuyers, property developers, landlords, investors, and self-build enthusiasts all use it to complete projects, including initial purchases.

How is a bridging loan different from a regular loan? For example, you can take a bridging loan out in multiple stages so that you only pay interest on the money that has been released to you, and if you prefer not to make monthly interest payments, there is also the option to retain your interest (and not just your fees) from.

A building, Refurbishment and Extension Projects. Bridging finance can also be used to fund building, refurbishment and extension projects.  For example on your property development, you can turn an existing commercial building into flats with the assistance of permitted development rights. For self-builds, you can create your ideal home or even a grand design. Lastly with extensions, with planning permission available you could create that perfect living space.

Financing Projects. Investors, businesses and entrepreneurs also take advantage of bridging loans to invest in projects overseas, purchase assets, increase business cash flow and make tax payments, such as income, capital gains, corporation, VAT and PAYE.

Richard Butler Creagh is the founder of bridging finance company Henley Finance, dedicated to helping property developer with fast loans. To find out more visit the Richard Butler Creagh website here. Learn more about the work of Richard Butler Creagh on the Sports Timing Solutions. Join Richard Butler Creagh professional network by on Linkedin page here.

Costing the country: Britain’s finance curse

‘Finance curse’ sucks talent and investment from other industries, costing £67,500 per person over the course of two decades, say, researchers.

‘Finance curse’ sucks talent and investment from other industries, costing £67,500 per person over the course of two decades, say, researchers.

The UK has lost out on a “staggering” £4.5 trillion over the course of two decades because of an oversized financial sector, a new study has found. The “gravitational pull” of the City of London has damaged economic growth by sucking talent and investment from other productive uses such as manufacturing and research while inflating asset prices, particularly property, a paper from The Sheffield Political Economy Research Institute concluded. Between 1995 and 2015 this “finance curse” has lowered cumulative GDP by 14 percent compared to what it would have been with a leaner financial services sector, the researchers found.

Between 1995 and 2015 this “finance curse” has lowered cumulative GDP by 14 percent. They drew on previous academic studies from economists at the International Monetary Fund among others, who observed that as the level of credit to the private sector increases it generally boosts the economy as funds are allocated to people and businesses that need it.

According to the new research, the UK, which has a very large financial sector, has foregone a “staggering” £4.5 trillion of economic growth – equivalent to two and a half years of GDP or £67,500 per person.The researchers concede that the results are approximate and that further work is needed to confirm the size of this effect in the UK and its causes. Meanwhile, financial services firms reaped an estimated £400bn in excess profits.

These booming profits and salaries pushed up the relative value of the UK’s currency, making manufactured goods and agricultural products more expensive to overseas buyers. Because the price of those goods is set internationally some businesses in those sectors have become less competitive or even unviable. There are many different financing options available to real estate investors. If you are a business in need of finance, then you can consult Richard Butler Creagh at Henley Finance. Follow Richard Butler Creagh on Twitter and connect with Richard Butler Creagh on his Linkedin page here.