Can You Afford A Commercial Bridging Loan?
Commercial bridging finance is often taken out by a business to unblock a chain so that it can complete on the purchase of its new premises because there has been a delay in the sale of its existing premises. If this action were not taken, it could result in the purchase of the new commercial premises falling through.
To get to an advanced stage in your prospective new purchase you have no doubt been involved in an element of expenditure. For instance, you will no doubt have incurred valuation expenses and possibly the cost of a full structural survey and you will undoubtedly have accumulated some legal fees. Therefore, if the purchase were to fall by the wayside due to delays in selling your existing premises this could prove costly.
Although the potential solution is to obtain a commercial bridging loan, you should enter into such a financial arrangement “with your eyes wide open.” You need to be aware of the potential cost of such a transaction.
It will not come as a surprise to read that lenders and brokers charge different fees/interest rates so it is important that you obtain specific quotes in respect of your own proposed commercial bridging loan. You will have to pay interest to the lender that is often worked out based upon a monthly % although you will also be provided with an annual percentage rate. You will also have to pay the lender an arrangement fee and a broker’s fee as well. In addition, you will probably have to pay a valuation fee and meet the legal costs of both the lender’s solicitor and your solicitor.
So, if you are considering entering into a commercial bridging loan, why not get in touch with us so that we can arrange for a specialist to discuss the proposition in detail with you and give you an idea of the potential costs of such borrowing.