Monthly Archives: June 2013

Bridging loan sector fills finance gaps

Q1 showed a rise in short term lending as the bridging loan sector fills the gap left by the banks

Members of the Association of Short Term Lenders advanced £288m of loans in the first quarter, up 1.8 per cent on the previous quarter’s total of £283m.

In the quarter, ASTL members received applications for £1.1bn worth of lending, down from £1.3bn in the previous quarter.

The total loan book at the end of the period was worth £1.1bn.

ASTL chief executive Benson Hersch says: “The figures reflect the steady increase I expected revealing the ongoing need for bridging finance. This has not decreased, despite pressure by government and promises by mainstream banks to lend more, as a result, short term loans are filling the gaps in many instances.

“After a significant rise at the end of last year, the current quarter has seen steady demand and I expect the next quarter’s figures, to continue to show a slow but steady improvement.”

The ASTL’s figures are produced and published quarterly and measure the lending of all of its members.

The figures come on the back of research from United Trust Bank last month which showed that nine out of 10 brokers believe the bridging sector has become less niche over the past 12 months. UTB surveyed 118 bridging finance brokers.

Speaking at the time, UTB head of bridging Alan Margolis said: “As borrowers have found their usual routes to credit closed off, brokers are considering bridging finance as a possible short term lending solution in more and more cases.”

Bridging Loan brokers image improving

Recent surveys of Bridging Loan brokers reveal that 91% believe awareness of the benefits and availability of bridging finance as a short term finance option has increased over the last 12 months.

56% of those surveyed also believe that the image of the industry for bridging loans has improved over the last 12 months. lead broker Michael Kennedy says, “Bridging loans provide flexible solutions to borrowers various circumstances and financial needs. We are able to tailor our bridging finance packages to suit the varied requirements and individual circumstances of each and every client.”

Used correctly, bridging finance solutions enable clients to achieve their goals with regards to short term finance needs in their buy to let or other forms of property purchase needs.

“As usual routes to finance have been closed to borrowers over the last few years, bridging finance is now considered to be an acceptable and reliable source of short term funding for projects and purchases.”