If you’re self-employed and are looking for quick funding to buy a property or invest in something, you might think bridging finance isn’t even an option. However, you could be pleasantly surprised. It’s actually very possible to get a bridging loan for self-employed UK borrowers and it can even be more straightforward than getting a traditional mortgage.
Many freelancers, sole traders, contractors and limited company directors have taken out bridging loans UK in the past. Even if your paperwork situation is complex and you’ve been turned down by a high street lender, you may have a better chance of getting hold of this short-term finance than you think.
What Makes Bridging Loans Different?
Traditional lenders tend to expect several years of accounts, payslips and a very detailed income history. This can be challenging when you’re self-employed and have variable earnings and are paid project-by-project, which leaves you with fluctuating and unpredictable income.
Bridging loan lenders have a different approach to these situations. They pay more attention to the value of the asset you’re using to repay the loan and how strong and convincing your exit strategy is. This means getting a bridging loan for self-employed UK borrowers can be a realistic prospect after all. A bridging loan can be ideal when you’re dealing with a property chain break or want to buy a property at auction and time is of the essence.
What Do Bridging Lenders Assess?
When a bridging loan lender is looking at your application, they will look at things like the value of the property. This can include its value once you’ve made changes to it if you’re refurbishing it. The loan-to-value or LTV ratio, which is normally around 75% and how robust your exit strategy is. They’ll also look at whether the property gives you enough collateral to cover the loan.
You’ll still need to go through a credit check, but these lenders are generally much more flexible than mortgage providers. As long as your project is viable and you have a good repayment plan, there’s a good chance you could get approved even if your accounts aren’t perfect.
Why Bridging Loans Are Suitable for the Self-Employed
Many self-employed people apply for bridge loans because they can be arranged within just a few days, they’re a great match for property development projects and because they’re ideal for meeting short-term needs. self-employed bridging loan eligibility
Whether you’re renovating a property, buying one at auction or have a cash flow gap to cover, a bridging loan can give you a practical solution that helps you avoid the problems that can come with traditional borrowing.
Let Bridge Loan Direct Help
If you need a bridging loan for self-employed UK borrowers and want to work with specialists in quick, simple temporary property finance, choose Bridge Loan Direct. We have years of experience to draw upon and can guide you through the process step-by-step and get you the best deal for your specific situation.
