Donald Canford is a financial adviser from the UK who specializes in arranging bridging loans. This week he spoke to us in this interview about how bridging loans work, who they are suitable for, and how the format of a bridging loan works for customers needing finance for property deals.
To some, the world of finance is a big mystery. How did you get involved in this field?
I trained as an accountant and after a few years decided that offering financial advice was more my thing. I am an expert in bridging loans, bridging finance, and all things related to this field.
Your company provides clients with bridging loans. What kind of loans are these?
Mainstream banks and finance lenders often won’t lend on properties that need work doing to them. Because of this, bridging loans can be a great way in which to finance property improvements due to the large sums involved. All bridging loan companies worth their salt should also be verified by the Office of Fair Trading.
Why wouldn’t people go straight to the bank?
I’ll explain this a bit more in the next question – but in simple terms, bridging loans are designed for people or businesses that need a very quick large loan. Most banks won’t finalise loan agreements quickly which is why bridging loans were designed – in essence to “bridge” this gap and help people out with a short term loan agreement for larger purchases such as houses.
Why do people revert to bridging loans?
The main and traditional moneylenders that you find on the British high street as well as the major banks typically take over a month to arrange and complete a large loan. For some people, they need money quick – for example during a house transaction. That’s where bridging loans come in as they can be very swiftly completed, sometimes in just a couple of days. Providing bridging loans is a very valuable part of the finance market and means people can complete large transactions quicker than they usually could.
How does it actually work?
It’s very easy to arrange a bridging loan. A customer would just visit a website such as BridgingExperts.com where there is a bridging loan calculator. From there they select how much they wish to borrow, then the bridging loans company makes a quick decision on whether to approve the loan. Documents will need to be signed, but usually once approved the bridging loan finance is in the person’s account within a few days.
I suppose you have many financial partners in the UK…
Yes. I personally work with many banks, brokers, and other financial institutions. My aim is to make sure that I always find the best bridging loan finance for my customers so key partnerships is essential in making that happen.
What are the costs involved?
Bridging loan interest rates are surprisingly competitive given the nature of the loan agreement. There are no up-front fees, and the chosen bridging loan broker that you choose will always try to find the best deal for a customer, with the lowest interest rates – it’s their job to do that.