What is a Bridging Loan?
Bridging finance, or bridging loans, are commonly a short-term funding solution used by landlords and developers who may not have the time or requirements to qualify for traditional bank finance.
Advantages and Disadvantages of Bridging Loans
The advantages of taking bridging loan finance include the speed with which the lender can provide funds to the borrower, without the borrower having to embark on the detailed administrative procedures often involved with traditional lenders. However, bridging loans are typically more expensive than traditional loans, where lenders tend to charge higher rates of interest and fees than the usual high street or commercial lenders because they can secure a large amount of funds for a borrower in a limited time frame.
When taking out a bridging loan, you will need to provide your lender with some form of security, in the form of a legal charge against your land or property; or another valuable asset. It is also very important to stick to your exit strategy at the end of a bridging loan. Failing to do so may harm your credit rating and your ability to secure future financing, as a result of additional fees; increased interest rates; and inevitable litigation. Additionally, failure to exit pursuant to the terms of the bridging loan could result in the lender taking possession the land; property; or valuable asset provided as security.
Legal Advice and Representation on Bridging Loans and Disputes
At Mercantile Barristers, our expert lawyers have experience of advising clients purchasing property at auctions; below market value; stuck in a chain; or simply wanting to refurbish their property. Our barristers are also adept at drafting bridging loan contracts and interpreting the precise meaning of terms including matters such as interest payments, default interest rates and events of default so that our clients enter into bridging loan agreements with their eyes wide open. We can also advise on the security documentation in respect of the security being taken by the bridging lender.
If a dispute arises or litigation ensues from a bridging loan, these disputes should only be handled by a legal professional with expertise in this area, who has the appropriate litigation experience to advise and represent you on a path to resolution.
Contact our Property Litigation Team today by filling in our Enquiry Form; emailing us at enquiries@mercantilebarristers.com; or by telephone on 020 4538 7806 and we would be happy to assist.
How Our Process Works
You can call, email, or fill out an enquiry form to tell us about your case. One of our specialist clerks will speak with you to make the arrangements to advance your case.
Our specialist clerk will match you with the barrister with the expertise to deal with all aspects of your case. They will also obtain and organise the papers the barrister will have to consider in your case.
Our clerk will agree the fee for your consultation with the barrister beforehand. The clerk will then arrange a convenient time for you to have the consultation by video call, telephone or in person.
In the consultation the barrister will assess your legal position, devise a legal strategy, and give you appropriate advice on the necessary next steps to achieve your objective.
Fill in the form below and one of our specialist clerks will get in touch.
