You can use the loan for many purposes. The most common bridging loans are for:
Tight transaction deadlines
Often banks and high street lenders cannot facilitate a short term loan quickly enough whereby it takes several weeks, often months to underwrite.
Banks will not lend
More and more banks have an inability to lend on non-standard mortgage deals. As such, a bridging loan offers a quick, realistic process with decisions made by real investors.
Business cash flow
This takes many forms and is very common. Whether it is to fund a short term cash flow requirement or to purchase a new business or even start a new one up then a bridging loan is often the quickest and most realistic prospect of
raising the funds. With this loan the applicant will need to demonstrate that they can repay the loan either i) through the business or ii) through sale of the security or iii) another realistic repayment model.
Paying tax liabilities quickly or divorce settlements
We provide bridging loans to pay tax bills or to help in a divorce settlement.
Renovation or refurbishment of a residential, commercial or buy to let property
We are finding more and more that banks will not lend on properties that are in need of refurbishment or redevelopment. In this instance a bridging loan is the perfect tool to help finish the property.
Auction purchase – pre-approval required and fast completion
Often clients require pre-approval for a property that they wish to bid on at auction and need to complete within 14 days after successfully purchasing the property. In this instance, a bridging loan is the perfect tool to help
facilitate the purchase. Often the exit strategy is to pay the money back via a traditional mortgage.
Chain break finance
A classic bridging loan need – where a client has an offer on their property but wishes to purchase another (or put a deposit down) and funds are required quickly for a short period and repaid when the property transaction completes.
Converting a property from a dwelling into flats or vice versa.
Landlords who are equity rich but cash poor / portfolio equity release
Many people, including landlords, have a lot of equity but cash may be tight. We will lend so that equity can be released from the properties in order to purchase new ones or pay off arrears and help get finances back on track.
Require a loan where interest is not serviced monthly
Interest on bridging loans can be serviced, rolled-up or retained. This means you can use the equity in a property to guarantee interest payments and these are paid on redemption.
Acquisition finance for business tenants to purchase their business premises from their landlord
Bridging loans for high net worth individuals
Large bridging loans for high net worth individuals for any purpose - subject to a realistic exit strategy.
Bridging loans for adverse credit applicants
Many people require a bridge because the banks and high street lenders have shut the doors firmly on anyone with adverse credit. A bridging loan is there to help get finances back on track, and in doing so, improve the credit scores.
Revolving credit facility (only on exceptional cases of low LTVs and high loan amounts)
We can offer a bridging loan secured against a main asset whereby the charge is registered and remains in duration and this allows you to draw down in stages as and when required.
100% purchase price with additional security
Somo will advance 100% of the purchase price where there is additional security or comfort charges.