Are you in a precarious financial situation? Have you been waiting for that perfect piece of property to come along for your business, but don’t yet have your investor funding in place to purchase it? Or maybe your family has recently found the perfect new home, but because the housing market is so slow, you’re having trouble selling your current property. In either situation, what you need is short term funding that will allow you to be an aggressive buyer, without having to stress about the money you know is coming your way. This is why many lenders are now offering bridging loans.

In case you’ve never heard of bridging loans before, you should know that they are specially designed short term funding solutions that are lent at a very high rate of interest. It might seem like this is just another trick that lenders will use to stick you with a loan that you can’t repay, but when you keep in mind that these loans are only meant to substitute for money that you know you’re going to have very soon, it really becomes the price you have to pay for convenience. These loans are typically used by private or commercial entities that want to buy property quickly, but don’t yet have the funds from the sale of their current property or investors.

For commercial buyers that are looking to purchase a property at auction, it is imperative that they have a percentage of the price to put down on the property so that other buyers can’t take it from them. Regular mortgages from the bank can take weeks and even months to go through, and by this time, they will lose the property. By seeking bridging loans, they will be able to get their approval in a matter of minutes, and in most situations the money will be in their account within a week.

In residential situations, bridging loans can still be a timely financial solution. What happens when you find the home of your dreams unexpectedly, and your current home isn’t even on the market yet?  An open bridge loan, which is designed for people that need to secure one property without a sale of the old one, would be perfect in this situation. If you’ve already put money down on the new property, you might benefit from a closed bridge loan, which is more secure since the new sale is much more likely to go through.