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The benefits and advantages of short-term funding for business

The demand for short term asset backed finance (also known as “bridging” finance) continues to increase year on year due to the ongoing lack of appetite and responsiveness from mainstream high street banks. In Q1 of 2020 we have seen an increased need for short term funding in the SME market place. The UK bridging finance market has grown to an estimated £5billion in recent years as companies have increasingly viewed short-term asset backed finance as an attractive option for a number of key business reasons.

Utilizing a bridging loan can provide a positive benefit for the borrower. Unlike many other types of finances, which are typically intended to be paid back over an extended period, bridging loans are designed as short-term products and they often represent the cheapest method of financing a property purchase or development project. Bridging loans can be arranged at very short notice and with flexible borrowing terms. In many cases, applications are approved in principle with no need for extensive background and credit checks and, as the borrower can provide the necessary security, there can be an excellent chance of being able to access to the funds required very swiftly. Another advantage of bridging finance is that the lender can consider using almost any type of property as security.

The market of possible lenders is quite diverse. The most progressive companies offer a bespoke service with every enquiry from a potential borrower analysed on its own individual merits. This approach enables the boutique lenders to build long lasting and successful relationships with their borrowers and introducers by consistently delivering a fast, transparent and easy to understand service. The response should never be “the software says no!”

Businesses of all sizes can benefit from working closely with a funding partner offering short term finance. The market is growing although still relatively low key despite offering a wide range of services which include –

Bridging Finance / Residential Investment and Commercial Property Finance

Property Auction Finance / Development and Refurbishment Funding

Business Cashflow and Capital Raising Finance

The short term finance market is a dynamic area to keep an eye on and we will be publishing a series of articles throughout 2020 on the rise and rise of the market as a whole