Is your Property Good for Commercial Mortgage

Why one should buy a commercial property? The answer is always business, property bought should suit your business needs. These factors are also considered when you are to apply for mortgage. Any commercial institution or private lenders looks into the business and also the value of property on which the loan is being taken.

Question coming in the mind of lenders

When you apply for the bridging loan or any commercial mortgage the lending company will look into several issues. Let’s know the points, better you stand on these more the chance of getting the loans approved.

A lender tries to know the service areas of the company, whether it is in producing company or servicing companies.

• He will check the previous year’s record and tries to analyze the profit of the company. The growth of the company increases the chance of getting the loans approved
• On mortgage the financial institution will also consider property and try to find the expected success ratios, your growing potential and the ability to pay the loan back.
• The location connectivity, with lands and other important mode of transportation is also considered.
• And if you go for more of a government financial institution than they will look for parking lots, arrangements for expected customers, flexibility and arrangements to deal with the growth in the next couple of years.
• Tax are also considered, how much money you need to pay for it. Will it not hamper the installments?
• The lenders also look to the nature of the business and also the past record of the location. They tries to find the chances of the business to flourish in the area, was there any business in the past, present, target audience and the availability in the area etc.

The lender may deny your application if they find any of the above points not fulfilling. Neither it should be too big nor too small. It should meet the business needs. The proper envision is made about the company including present to future. Every minor and major detail is taken into concern before transferring the cash in your account.

What is a good Commercial Property?

A good commercial property is one which has a great potential to grow. It should meet the current plan and future strategy of the land owner. The bridging loan is said successful only when one earns profit from the same.

When a lender finds that lending a bridging finance is not going to be a bad deal you will easily get the money for your better prospects. However there are some approved conditions that need to be taken care of like the borrower should have fixed and regular source of income. The money is lent on the earnings ratio. The collateral should be valuable one and last but not least, you must have a bank account. Wish you a successful transaction; it should give you better rates and wonderful commercial financing.

Understanding Bridging Loan And its Priority

Bridging Finance is referred as bridge loans.  And it has nothing to do with the construction work of any bridge. It is simply a way to minimize the economical problem between two transactions. Generally these are short term loan and carries high interest rate. These are easily available and neither these requires any credit record. Off-course there are some preliminary conditions like you need to be of 18 years age, should have a regular source of income and something worthy that can be kept as security.

These loans are used to supply cash mainly for sectors like real estate. The borrower can seek help from the lenders until the permanent financing is not arranged. Hope the word bridge is now clear, it is just to overcome temporary obstacle.

Uses of Bridging Finance

A distinctive use for a bridge loan comes when there is a gap of sale and purchase between two real estate properties. For example, consider a company who want to shift to new office building before closing the old one, from where the money will come. The company will proceed towards the financer who will provide them the bridging loan. The money of the loan will be paid when the old office is sold. This mode of financial help allows having two properties at a time.

Bridging Finance always requires that you vow collateral as security. This is done against the financial help you get from the lender and somewhat it is important too because lenders need a sense of security for the money he is spending. However, if you have outstanding business good record of personal credit, wonderful relationship with the lender, you will be able to get the cash with just a signature.

The need of bridging finance often arises suddenly and that too without warning, it is always suggested that one should have good relationship with the lender. This will help you get pre approved loans. The time span of these loans lies between 14 days to 2 years depending upon the amount of the money. The terms of the bridge loan can be negotiated too. 

Interest Rate Applicable for Bridging Loans

Bridging Loans lasts for a short period of time (as compared to other loans). This is the reason why these loans have higher interest rate. Higher rates are the only source of profit for the lenders. Secondly shorter the period of loans more is the interest rate; generally it varies from .05%. There are mainly four factors which decide the loan and its interest rate in general.

·               Length of the loan (Time Period)

·               The risk involved in the loan,

·               Your credit history

·               The liquidity and collateral for the amount 

Tips to get Best Bet

You are looking for the bridging loan at best possible rates. The only way to crack the answer is to search for the financing company who can offer you the sum at most affordable rates. Search on the internet fill the online form and ask for the quote. Choose the one which suits your need.

Bridging Finance Perfect for Bridging Real Estate Investment

Bridge loans or bridging finance are the immediate financial help that helps the investor to bridge the financial gap that appears because of sudden property investment. Generally it is a short-term finance used by businesses to help with cash in real estate transaction. This allows the person to have money instantly and later he can arrange for some permanent solutions. The word "bridge" as prefix conveys the fact that the loan is intended to get you over a momentary monetary obstacle.

For example an office needs to open a new building before it closes the old one. As, they can’t halt production, so, they need to set up new office before the closure of the old one. Here bridging loans come as ultimate survivor.  The business owner uses the immediate proceed of the bridge loan to make the immediate payments and later when the old office is sold back the payment is made.

Bridging Finance always requires collateral. The reason is that the amount is generally large and they are often leased for shorter period of time. Investors are generally at risk. Just to minimize the risk of investor some sort of collateral is taken against the loan. This is somewhere equal to the amount of loan taken in the form of bridging loan. These loans are also extensively used by corporate offices in the process of buying office machinery and office equipment. And the best part of these loans are that If you have good influence over market and great relationship with the lender, bridging loans can easily be accessed.

Tips to get Bridging Finance Easily 

Financial need always arises instantly. One needs to be always prepared for any kind of instant economical crisis. It is a good idea to have a relationship with a lender. This will actually bring you in a status of pre approved loans. The typical time frames of bridge loans are 14 days to two years. The hard and fast rules are on papers but it is not a bible. This means there is a scope of negotiations. Better you can bargain more you have a chance of signing cheaper deal.

Bridging Finance are usually for shorter period of time, so there are very much chances that you may need to go for higher interest rate. Lenders make their profit by charging higher interest rate. Interest rates of any bridging loans are determined by following four factors….

• The time span of the loan Risk involved in the loaning process
• Quality of the credit history
• Liquidity present in the market
• Value of your collateral 

The best way of securing bridging loan at the best possible rate is to search for a good loan providing websites. The financial institution should have good credibility and you can also compare rate of different banks and loan giving institution online. Internet has also provided the process of loaning easier by providing online filling option. This way one borrower can pass on the application to as many lenders and choose the one which suits the pockets best. 

Bridging Loans- Why You Need Them?

Bridging and collateral loans are getting common these days. People are finding hard to manage their monthly salary and at month ends they often struggle. Investing on properties means another hectic task. Either the man needs to be born with Golden spoon having strong ancestral base or he should be in elite class having millions as a monthly salary.

But these elite classes don’t form population. Concluding, one needs to depend on other alternates. Property investment requires lump amount and so you need to save for years before investing. Otherwise, you need to go for instant loans. Financial institutions provide various kinds of loans including bridging loans, collateral loans etc. These loans are easily available but need to have financial backing or these loans need collateral before it’s granted.
Bridging Loans Basic Requisites

• The borrower needs to promise assets equal to the economic value of the loan. This is just done for the sake of lender’s security. If the borrower cannot pay back the money on time the lender can hold his/her assets.
• At times, due to adverse condition sometimes it becomes hard to return the money back. The collateral normally works as second holding. For example if a borrower utilizes the loan just to assure any auction the auction will be termed as collateral.
• These kinds of practices are common among commercial enterprises that are often in need of quick cash. Enterprise holdings are used as collateral. It is not only those real estate properties are used as collateral, sometime Gold or expensive metals are also used as collateral.
• If the borrower is unable to pay the amount the collateral may be seized and transferred to the loan company.

• Expenses of Bridging Loans
• Bridging loans requires a handy amount of fees to get the loan commenced.
• Monthly instalment with added amount of interest is required to pay the amount.
• These loans are short term loans so often instalments are heavily set and carries higher rate of interest. Benefits of bridging loans are that they are easily accessed.
• Some financial companies also charge some fees for closing the transaction.
• A tip for borrower, before signing any document it is important to go through it carefully. Read all fees and charges connected with the bridging finance and sign only when you are comfortable with it.  

Why do people need bridging loans?
Loans are always taken, when there is scarcity of money, or when one needs money urgently. Bridging loans are often taken when transaction is required between two properties. When people get stuck between properties they opt for bridging loans. The best example of bridging loans can be explained with an example….You are waiting on selling a holding, but before that you want to buy a new properties here the only options you are with is bridging loan.. Get the loans and pay back the amount when you are sold with it.
The bridging loans give the borrower extra time to tackle with other holding. Sometime original holding comes across problems and the sale process cannot be completed on time. In this case they go for the second holding; however the first one is still left to compete with. Bridging loans helps the owner to remove the holding without losing the other one.