Short Term Finance

Short Term Finance, Short Term Funding or Bridging Finance are all terms used to describe various forms of lending specifically intended for circumstances where the finance is only required for a relatively short period of time (generally up to 12 or 24 months maximum) and where the `exit route` is known in advance. The `exit route` is the means by which the finance will be repaid at a specific point in the future.

Short Term Finance or Bridging Finance can be arranged on a first charge (mortgage) or second charge (loan) basis, which generally depends upon the specific circumstances and the security available. There are a number of reasons why short term finance or bridging finance would be used, some of the more common examples would be

• Bridging the timescale gap between the sale of one property and the purchase of another – It may be that your property is taking longer than anticipated to sell but you have seen the property you want to buy and if you wait until yours sell you may lose it
• Investment in business opportunities – A business opportunity may arise which requires you to raise capital quickly which you only need for a relatively short timescale
• Buying property at auction – Many lenders offer a `pre-approval` scheme whereby they will provide an
  in-principal approval for finance up to a limit for a property or properties you may wish to bid for at auction
• Renovating property with a view to selling – Capital may be required to renovate a property you own with the plan being to market and sell it once the renovations are completed
• Providing short term capital whilst a longer term arrangement is in the pipeline – Whilst waiting for a mortgage or remortgage to complete a very short term arrangement may solve some immediate issues
• Awaiting an inheritance or paying the required inheritance tax – People waiting for an inheritance to be processed who require immediate funds or who require the funding to cover any inheritance tax
• Clearing unexpected HMRC and general business expenses – Paying urgent bills or demands without suffering short term cash flow or capital adequacy issues
• Providing short term capital until investments mature – Whilst waiting for the known maturity of an investment short term funding could provide that much needed capital

As is often the case, Short Term Finance or Bridging Finance could be the perfect tool for these and many other scenarios as speed is often of the essence. It has been known for transactions to be fully completed within a single working day.

If you have a short term finance need and think short term or bridging finance may provide the solution, or if you need help and guidance on what the best solution for your circumstances may be, call us today on 0845 219 0427 or 0121 308 9114 to speak to an adviser. Alternatively complete our short enquiry form and an adviser will call you back to discuss your needs.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE SOME TYPES OF BRIDGING AND SHORT TERM FUNDING.