Bridging X Factor


The X Factor may now mercifully be off our screens for another year, but the show’s title and format got me thinking about what sets the bridging sector apart from its rivals.

In the early auditions, when other financing options struggled, bridging shone through with a clear and straightforward performance. Bridging lenders’ decision to be pragmatic rather than use box-ticking criteria allow them to stand out from high-street lenders. While other forms of financing sometimes require what seems like your entire life story, bridging lenders just need the important information. As you can apply online, the simple application forms take the stress out of accessing capital. allowing you to relax in front of your TV on Saturday evenings.

Progressing on to boot camp, bridging lenders excelled because the industry could offer stellar performances much faster than any other types of financing. If you decide to apply, most bridging loans can granted within a couple of weeks, some will take just a few days. This easily outperforms high street lenders, with mortgages often taking months to arrange. The fast finance available through bridging loans is important when you have need to buy more time to finish your project or arrange long-term alternatives.

At the judges’ houses, the flexibility of the industry proved a hit. Bridging is more flexible than the alternatives because you can pay off your loan before or after you’ve secured a source of long-term capital. While mortgages tie you down with long-term repayments, bridging loans let you repay in full or in fixed repayments over a short time frame. When you make these repayments it also boosts your credit rating. This could help you secure other forms of financing which you didn’t qualify for prior to the bridging loan.

As we progressed to the live shows, bridging became the obvious favourite due to the significant boost it can give your business. The loans allow you to make the most of the opportunities available because they enable you to perform with perfect timing. Bridging could help you to buy at the best time when you find a bargain property at the auction.  Alternatively, the loans could provide the instant injection of capital to keep you project going, so you can sell at the right time. As well as paying for labour, equipment and materials, bridging loans could also cover any urgent tax demands in case you end up like former judge Gary Barlow.

In the final, everyone was singing the sector’s praises because bridging loans help when no one else will. The short-term finance sector prides itself on its high loan conversion rate as it grants loans to most applicants. Bridging lenders won’t base their decisions on an applicant’s age, employment status or poor credit scores. Instead, lending approvals are based on the assets placed against the loan, so bridging lenders can provide vital capital even when high-street lenders refuse.

Having won the contest, bridging loans are more popular than ever. The latest West One Bridging Index revealed that annual gross bridging lending has now reached £3.2bn, with short-term finance transactions significantly up from 2014. With this success, we should expect a lot more hits in future.

Duncan Kreeger is managing director of West One Loans

This article originally appeared in Mortgage Introducer auditions

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