Is It Possible To Obtain A Bridging Loan With Poor Credit?
If you have an adverse credit history then this will reduce the number of lenders that will consider providing you or your business with a bridging loan. However, there are still a number of lenders that will consider providing such short-term finance –it is just a question of sourcing them.
To do this, you could go online and type something like “ bad credit bridging loans” into your browser’s search box and you will be presented with various websites of brokers and lenders that will consider providing/sourcing such finance for people/businesses with a poor credit file.
Why would a lender still consider providing such finance?
A bridging loan lender’s main concern is that the amount it lends together with the interest that it charges is fully repaid at the end of the agreed repayment period. Repayment would often come from the sale of the property that the funds are required for to buy the property or due to the borrower arranging more long-term finance elsewhere to liquidate the bridging loan.
The lender will no doubt require a reasonable security margin (Loan to valuation – LTV) to ensure that the borrowing/interest is comfortably repaid. This would usually be in the form of a first legal mortgage over the property that the funds are required for to buy and/or say a second mortgage over the residential home of one or more of the business owners.
Will you be charged a higher rate of interest?
Each lender that is prepared to consider poor credit bridging finance will have its own criteria as far as this is concerned but it is quite possible that the interest rate may be higher than if the applicant had a good credit score in view of the perceived greater risk.
The way forward?
As stated above, you could try to source a suitable lender yourself but this may take some time. Another option is to get in touch with us here at Commercial Mortgage Link and we will put you in touch with a broker who will do all that he or she can to source and help package an application to a suitable lender that has experience in providing bad credit bridging finance.