A Detailed Overview & Benefits of Bridging & Development Finance in the UK
Bridging & development finance in the UK means different things to different people. Some might think of it as affordable credit offered by private lenders; others may think of it as an extension to provide an additional short-term loan in order to cover debts or merely another name for development finance.
Whatever it means to you, bridging & development finance in the UK has many benefits that you may not be aware of at first glance, particularly if you’re a small business owner looking to grow your company without going bankrupt before you make it big.
Here we are going to discuss both bridging finance & development finance in the UK separately. In order to find out the most useful and authentic information about both of these loans, please continue to read until the end.
What is bridging finance?
A bridge loan may be what you need when banking institutions turn down a company's request for financing due to long waits between contract signing and full payment collection from another lender or customer.
If you have an idea for a business and need money to get it off the ground or expand it, but don’t have access to traditional sources of finance, then bridging or development finance could be your answer.
A bridging loan in the UK is typically a short-term loan that companies use to fill a funding gap between traditional bank loans and external sources of finance. This kind of short-term loan can be used for everything from capital investment and business acquisition to supporting cash flow during working capital shortages.
This bridging finance in the UK is usually shorter than traditional loans, usually lasting up to three years, but sometimes even shorter depending on your need. Also called a bridge loan or gap financing. It's debt: don't confuse it with mezzanine financing which is also related to bridging.
Why do you need bridging finance in the UK?
If you’re seeking funds to keep your business afloat or fund a new development project, bridging finance in the UK can be a godsend. This short-term finance product gives businesses and property developers access to funding for up to three years, helping bridge periods where loans from more traditional lenders such as banks are not available.
In many cases, bridging finance comes at lower rates than traditional bank loans—but they come with some caveats. Bridging finance in the UK allows entrepreneurs to move forward with projects that have already been financed by regular bank loans.
It bridges over gaps between other loans where there is a significant time lag (over 12 months) between receiving one loan and paying it back, allowing an entrepreneur to take advantage of an opportunity that would otherwise be lost.
Essentially, Bridging finance in the UK types of loans allow small companies to remain solvent while large corporations wait on loans. They also allow larger firms to pay fees like taxes and salaries during development stages before closing.
How Much Bridging Finance in the UK You can Get at Finance Hub?
If you’re looking to secure capital, you might want to consider a bridging loan. They’re also known as bridging finance or bridge financing. This type of loan is designed to help bridge a cash-flow gap when a business has something that needs funding and doesn’t qualify for traditional financing. Once your project is underway, you can pay back the bridging finance.
At Finance Hub UK, we provide leading bridging development finance for SMEs throughout England, Scotland and Wales. Our team of experts works with clients from start-ups to large enterprises on projects ranging from £5,000 to £20 million.
Bridge loans are an excellent choice if you don’t have any collateral but still need quick access to capital or if you need some working capital now while waiting on other sources of money down the road. Plus, they’re fast—we typically give you money within three weeks after submitting an application.
We review applications quickly and make funding decisions right away so you get your money faster than most other companies out there. You can borrow 1 to 7 years at Finance Hub — more than double what many companies offer. Other bridge lenders in the UK only offer terms of 24 months or less, which isn’t long enough to meet all of your funding needs.
What are your options for bridging finance in the UK?
Do you need to buy stock and can’t wait for payment? Maybe you want to buy a tractor, but your bank won’t finance it. Perhaps you run a small construction company that desperately needs a new truck. If any of these situations sound familiar, consider bridging & development finance in the UK as an option.
There are several types of loans that fall under bridging finance, which essentially means they bridge — or cover — an interim period between two financing stages. In some cases, bridging finance UK serves as a way to get capital while waiting on another loan application process to go through.
Other times, it helps people fund projects until they’re paid by customers. Whether you’re funding daily operations or getting ready for larger projects like development and construction, there are several types of bridging finance options available.
Finance Hub offers all kinds of different creative methods to help you access cash fast. From invoice discounting to development finance UK, there are more alternatives than ever before. Moreover, apart from these loans, you can also get the services of business appraisal UK and commercial mortgages at Finance Hub.
What is development finance?
Development finance is a financial tool used in the early stage of a business's lifecycle when it is difficult to obtain external finance. It involves the provision of debt, equity and/or hybrid financing to help a company expand, acquire new assets or enter new markets.
Development finance enables businesses to access the capital they need to survive and grow while supporting the social and economic development of the countries in which they operate.
What is the Difference Between Development Finance & Bridge Finance in the UK?
When it comes to bridging or development finance UK, there’s a lot of confusion around what exactly is available. As funding can vary significantly depending on your specific business and project needs, it’s important to understand how both work and how they can help make your project come to life.
In practice, you may find yourself looking for either bridging or development finance. However, while these two terms are often used interchangeably, they actually refer to quite different things. This can cause unnecessary confusion when looking to secure financing for a new venture.
For example, if you were considering borrowing money from an investor but needed a quick cash injection in order to kick-start your idea, some would say that such investment should be classed as development finance – not bridging finance.
But others might disagree and suggest that such funds should fall under bridging finance UK due to their temporary nature. So, which one is it? Well...they’re both correct! The truth of the matter is that most lenders will use ‘bridging finance’ or ‘development finance’ interchangeably.
Although it’s easy to get confused, many people tend to use the term ‘bridging finance’ in reference to short-term loans taken out by small businesses. On the other hand, ‘development finance’ tends to be used more with start-ups and established companies who are seeking long-term loans (or investments) during periods of rapid growth.
The key thing to remember here is that regardless of whether you choose 'bridging' or 'development' finance, interest rates and repayment periods aren't always set in stone so don't assume anything until getting expert advice. And if you need any help selecting between options - don't hesitate to contact us.
Why use development finance instead of other loans?
By using bridging finance, you can access funds quickly and use them to kick-start your project. It doesn’t matter if you have bad credit or are a first-time borrower: development finance companies look for projects that have the potential to succeed.
Moreover, bridging finance UK is flexible enough to cover specific stages or aspects of your project. If you don’t need money from day one, but need it, later on, most development finance providers in the UK including Finance Hub offer repayment terms that can be tailored to suit your needs.
Turn your head towards the Finance Hub blog section to know more about how our bridging & development finance services in the UK work. You will find information about the types of deals we fund, what we require from borrowers and other useful details.
We always keep our customers informed. And when you want expert advice about how to go forward with your plans, contact us directly at 0330 127 6365. We also offer other small business loans that help get your business up and running. Our customer service team will help you out immediately – even during out of hours by email!