Bridging loans in Singapore are a growingly popular money lending technique nowadays, and is one of our very popular loan options. Here, we shall help you better understand the concept of Bridge loans and why you should come to us if you need one.
01 What is a Bridge Loan?
Bridge loans are short-term loans which provide steady cash flow and help you fulfil some current obligations before you secure a payment from another place, which might be your permanent source of income or any other secondary income which is about to come in a short term. Bridge loans, as the name suggests, are used to Âbridge the gap between your current obligations and the financing that you need but which is not yet available.
02 Do you need a bridge loan?
You might be a corporation or an individual, but the answer to this question more often than not is a yes, you do. But, for your better understanding, consider this example, which is a very common situation when people consider bridge loans: You are about to sell a house and buy another one. But the house which you wish to buy is moving out of the market before the payment for the house you are selling comes through. Here you have a financial source but it will not provide you the financing you need because you need it right now. This is where bridging loans come to bridge the gap. We provide you the financing you need with a short term loan to help you secure the house and you clear the loan when you secure your financing in the future. Yes, it is very helpful and can save you a lot of anxiety by providing you with money just when you need it.
Another example, which is very common for businesses and large corporations, is when the said corporation is waiting for a larger and long term financing to come through and need money between the time to cover their interim expenses until the long term solution passes through. Needless to say, that it is very helpful in trying times and provides a steady cash flow when required.
03 How is a Bridge loan different from a traditional loan?
Bridge loans are faster solutions when compared to traditional loans and that is exactly what you need when you need to fulfil your obligations at the moment and cannot wait to secure a long term traditional loan which generally takes up a lot of time. But in case of bridge loans, we have a faster application, approval and financing process, and this is what you should go for if what you are looking for is a convenient way to get access to funds fast.
04 Why should I go for a Bridge Loan?
When your future source of income is clear and you know that you will be able to secure funds in the near future but need access to financing to fulfil some obligations that you might have at the moment, as a corporation or an individual, bridging loan is easily the best choice that you have. Why? Because you get access to funds conveniently and quickly and are ready to use it for what you need and, because you know that you will be securing funds in the future (from your permanent annual income or from the sale of a possession), you can easily repay it without any inconvenience. But in the case of simple, traditional loans, you get access to funds relatively slowly and the payments are long term and not suitable for your needs.
05 What will we, the bridging loan provider, check in your application?
Typically, we, the bridging loan provider, will check if you have income coming through from some source in the near future so that you are able to fulfil the repayment in the required time period. We will also check to see if you have an alternative source of income if the income in consideration does not come through in case of some unwanted circumstances. But these should not be a problem if the source of income in consideration is your permanent source of income, as it is risk-free.
Thus, it is safe to say that bridging loan is a great way to provide yourself with funds on time and provide yourself with some breathing space and relieve yourself of a lot of worries. For example if you have made a contingency offer on a particular real estate, and the seller issues a Notice to Perform, a Bridge loan from us is the best way to go as it will allow you to secure the funds while there is time and help you secure the real estate that you wish to have and you can repay it at a time in the near future when the income which you were waiting for comes through. Thus, it saves you a lot of trouble and the possible loss of the property you were considering to secure.
If you still have queries, you can always contact us. We would be more than happy to help. That’s what we are for at Orange Credit.