Re-Bridging Finance

What is Re-Bridging Finance?

Re-Bridging Finance is a short-term solution designed to replace an existing bridging loan when the borrower hasn't achieved the planned exit strategy. If your current lender won't extend the loan term or is imposing high default rates, re-bridging can provide the necessary funds to settle the original loan and grant more time to secure the desired exit.

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Why Consider Re-Bridging?

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• Better Rates: Secure more favourable interest rates.

• Extended Time: Gain additional time to sell or complete your property project.

• Avoid Default Penalties: Prevent costly default charges, which can be as high as 21% on the first day of default.

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Refinancing Bridging Loans

 

Refinancing a bridging loan involves replacing the existing loan with a new one, often to benefit from better terms, access more funds, or reduce interest rates. Refinancing is typically quick, taking about two weeks, although some cases may be completed faster.

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Key Considerations

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• No Early Repayment Charges (ERCs): Bridging loans generally don't have ERCs, making refinancing a flexible option.

• Rate Stability: Refinancing usually offers similar rates unless the borrower's circumstances have changed or additional collateral is required.

• Loan-to-Value Ratio (LTV): If the new loan amount increases, additional assets or a higher property value may be needed to maintain the same LTV ratio.

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Re-bridging finance is an effective tool for borrowers who need to restructure their financing and avoid the risks associated with loan defaults, making it a critical option in property development finance.