Self employed bridging loans - A solution to your immediate loan need

What is a bridging loan?

It is a short-term loan used by a person or company until a permanent financing mode is secured or an existing obligation is removed. It allows the user to meet current obligations by providing immediate cash flow. They have relatively high interest rates and are backed by some form of collateral such as real estate or inventory.
This mode of financing is also known as interim financing or gap financing.

What are the types of Bridging Loans?

Bridging loans are of two types:
Open Bridging Loan - this comes into action when final terms and conditions have not been agreed. You may not have on the terms by which you are going to sell your home yet but you are still determined that you want to go ahead with the purchase of the property you are buying.
Closed Bridging Loan - When all terms and conditions of both sale and purchase on both properties have been agreed but there is still a delay on moving in, then you can use a bridging loan.

How can a bridge loan help the self employed?

As the term implies, they "bridge the gap" between times when financing is needed. They are used by both corporations and individuals for many different situations.
For example, a self employed person might be expecting some payments to come from the distributors and in the meanwhile he/she has to pay its suppliers and employees. A bridge loan can be used to secure working capital until the payments come through.

Bridging loans are short term, high value loans, usually secured on a property. The most common use for bridging loans is to fund the purchase of a new property, when you won't be receiving the proceeds from selling another property for a month or two.

Mortgages and secured loans are almost always designed to be paid back over a period of years - up to 30 years or more in the case of mortgages. Bridging loans, on the other hand, are generally taken out with a repayment term measured in months. Also, bridging loans are much quicker to arrange - so if you need a large amount of funds fast, they make an excellent choice. Many lending institutions offer bridging loans to people of all financial circumstances/histories if they have the assets to secure the loan.

So whether it's a residential house, commercial property, office block, property auction, factory, hotel or even development land, indeed whatever your property finance needs, it will help you to bridge the funding gap.

What are the uses to which the bridge loans can be put to?
Bridging loans can solve many kind of financial shortage. There are lots of reasons why you should take bridging loans. Bridging loans for self employed are available for

• Purchase of property in auction.
• Purchase of new home before selling the previous.
• Purchase of investment property.
• Temporary finance for purchase of defective property.
• Extensive renovation of property.

More about bridging loans:
Self employed bridging loans are short term loans. The loans term for bridging loans for self employed usually extends from 1 month to maximum to 12 months. The loan amount for self employed bridging loans ranges from £50,000-£500,000. At Loans for self employed 70-85% is available as bridging loans amount on the first mortgage basis. Often 100% as bridging loans amount to self employed is provided in case there is second property available with sufficient equity.

For self employed looking for bridging loans would need audited accounts of two to three years as their income proof. If self employed are new in business they can provide a letter from their accountant as income proof. However, self employed who do not have any authorized way to prove their income can also find bridging loans at Loans for self employed.