Secure the most affordable Open Bridging Loan to drive your ambitious commercial projects towards completion.
Open Bridging Finance for all UK businesses.
Open Bridging Loans – Flexibility to Suit Your Requirements
Bridging loans offer a great way for businesses to keep the wheel of progress turning.
A business is only as healthy as its growth rate. To keep this growth rate climbing upwards, it becomes imperative for every business to find new avenues of expansion. This, needless to say, isn’t possible without spending extra capital.
At times, however, the lack of readily available capital can immediately stop such a project right in its tracks. This is when a bridging loan can be immensely helpful.
What is an Open Bridging Loan?
An open bridging loan or an open bridging finance package is a bridging loan that doesn’t have a fixed repayment date.
Characteristic of an open bridging loan are:
- Being a bridging loan, it is typically a short-term mortgage.
- The agreement for an open bridging finance package is drawn without a fixed exit date in place.
- Open bridging loans carry inherently greater risks for the lender.
Why do Businesses Need an Open Bridging Loan?
There are many situations in which open bridging finance can be the most favourable option for businesses. The underlying reason that a business may choose to take an open bridging loan is the uncertainty over the execution of the exit strategy.
Let’s consider an example to better illustrate this uncertainty.
Let’s say that a business currently houses its operations in a city warehouse. As the business expands, the available floor space doesn’t suffice. So, it makes more sense for the business to move to a larger, cheaper warehouse away from the business district. As the need to expand is pressing, the business may wish to immediately purchase the new warehouse property.
However, funds required for the same can only be arranged by selling the existing warehouse. This sale, again, isn’t always straightforward. The entire process may stretch over weeks, if not months. In such a scenario, the business can choose to apply for an open bridging loan, provided that the lender is satisfied with having to account for this uncertainty.
How does Open Bridging Finance Work?
Open bridging finance works just like any other bridging loan. Please visit this page to learn more about how bridging loans work, and how Commercial Finance Network can help you secure the most affordable bridging finance package.
Open bridging loans are structured around the repayment potential of the borrower, rather than the repayment date. So, in a sense, taking an open bridging loan is akin to extending your line of credit.
Open Bridging Finance – Convenient, But More Expensive
Open bridging finance lacks the foundation of undisputed collateral that other bridging loans enjoy. Even if a property is put up as a collateral, lenders aren’t too keen on dealing with the consequences of foreclosure. Hence, quite naturally, only specialist lenders entertain open bridging finance applications.
Another repercussion of the uncertain exit strategy is that open bridging loans typically carry higher interest rates than other bridging finance products.
Open Bridging Loans – Weighing the Pros and Cons
Let’s assess the comparative advantages and disadvantages associated with open bridging finance.
- Flexible repayment options
- Flexible loan tenure
- Best suited for property acquisition projects
- Higher interest rates
- Fewer lenders
- Longer processing times
Open Bridging Loan Offers Curated from UK-wide Lenders
Commercial Finance Network, being a veteran commercial finance broker, has access to a diverse panel of UK-wide lenders that specialise in open bridging finance.
Stop having your open bridging loan applications turned down by lenders – let us take the charge of the proceedings. Get in touch with us to arrange a prompt call back today!