16th April 2019

Bridging With Bad Credit

Don’t let bad credit deter you from a bridging loan

Reaching your property development goals often comes down to a combination of patience, perseverance, and financial assistance. But for investors with questionable credit, those obstacles can seem insurmountable. Fortunately, bridge loans are not only ideal for investment activities like purchasing or refinancing properties in need of refurbishment, bridging with bad credit is a viable option.

What is a Bridge Loan?

As the name implies, short term bridging loans are finance solutions designed to “bridge the gap” between your current monetary position, and your temporary financial needs – a gap that’s not always addressed by traditional funding.

Many property developers and property investors pursue bridge financing for:

  • house purchases – especially those involving auction transactions,
  • coverage of mortgage delays, or
  • quick funding for unexpected bill payments

But bridging finance solutions are especially well-suited to situations where borrowers need support until such time as they can refinance a debt or sell a property.

Fast bridging loans make it possible to benefit from investment opportunities as they arise. They do this by giving you the means to quickly purchase and resell a property for profit, or by providing the time needed to arrange long term financing so you can hold a purchased property for investment purposes.

When it comes to bridging loan eligibility, however, one of the most common questions we hear is: can I take advantage of bridging with bad credit? The short answer is yes, you can. And while there may be specific limits imposed by bridging loan companies, borrowing with adverse credit is a specialist area in which certain lenders do operate.

How Does a Bridge Loan Work with Bad Credit?

Despite the fact that most credit cards, mortgages, and other bank loans involve a credit check, poor credit history tends to play a less important role when it comes to getting a bridging loan approved.

Because bridge financing is a short-term affair, bridge loan specialists are typically more concerned with the value of the property you’re using to secure a loan than they are with your credit score. In fact, you can usually obtain a loan on any property-related security – including land without planning.

How does it work? Lending specialists who offer bridge loans will:

  • have a valuation performed on the property you wish to use as security,
  • determine whether the value of the property is enough to cover the amount of the bridging loan, and
  • consider your property collateral should you be approved for a loan but fail to meet your repayment obligations

Whether you operate a business, or you’re an individual investor, don’t let your credit situation deter you from exploring your property bridging loan options.

There are any number of reasons why you might need to raise funds quickly, and bridging finance offers a fast, cost-effective way to cover the interval between two transactions. Remember: your bad credit status won’t necessarily deny you access to temporary funding, and getting approved for and repaying a bridge loan may even improve your credit score.


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