Bridging Loans for Bad Credit

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    Are you looking for a bridging loan but have a poor credit rating? The experts at One Commercial Loans can help you to source bridging finance fast.

    Bad credit needn’t stop you from obtaining bridging finance for your next property deal – you just need the right broker. At One Commercial Loans, we have many years of experience in helping clients to obtain bridging finance, even those with a poor credit score. We’re confident that we can find the right bridging lenders for your property purchase, refurbishment or refinance deal.

    Working with a broker is essential if you have a poor credit history. We will allocate an experienced advisor to ensure that your bridging loan application is credible and meets the criteria of select bridging lenders. We also have access to exclusive products only available via a broker.

    To find your perfect bridging finance, please fill out our enquiry form, and we’ll be in touch.

    Can I get a bridging loan with bad credit?

    A bridging loan is ideal for gaining quick access to funds for property purchase – even if you have a bad credit history.

    Unlike other forms of finance (such as traditional mortgages), bridging loans for bad credit are designed to be taken out over a shorter period of time and can typically be arranged within weeks or even days. While they naturally attract higher interest rates, bridging loans provide great flexibility to those looking to buy or refurbish a property quickly.

    An adverse credit history can have a negative impact on a lender’s decision, but it is not always the case. While it’s true that some lenders will be reluctant, other lenders will offer loans in this scenario. The key is to prepare your application well and approach the right lenders, which a broker is best placed to do.

    How to get a bridging loan with bad credit?

    Making a good case to the bridging loan lenders is essential for it to be approved. They will always carry out a credit check, so making a strong case that your application should be considered will help to negate any issues that you have had in the past.

    • Be clear on your exit strategy. Starting at the end may seem counterintuitive, but your exit strategy is a key factor in getting your loan approved. Bridging loan lenders are less concerned with credit history and more concerned about how you intend to pay them back – if this is achievable, you are on your way.
    • Show evidence of your proven track record. A history of successful property projects will help, as will previously borrowing and paying back a bridging loan.
    • Offer multiple assets. If you can offer up any other asset that you own as security for this loan, such as property or income, it will provide reassurance to the lender of a “plan B”.

    How does a bad credit bridging loan work?

    The application for bad credit bridging loans is the same as regular bridging loans, but lenders will require more evidence that the borrower is worth backing if there is a history of non or late payments.

    Most lenders will deem a bad credit borrower as high risk but may still lend based on a slightly higher interest rate and arrangement fee. Lenders know that not everyone has an excellent credit score, so they have built into their criteria some flexibility for this situation.

    What types of bad credit will have a negative impact on my application?

    You could be excused for feeling like you need a degree to understand your credit file, but don’t be put off – it requires thorough checking before making a bridging finance application, which a broker can help you with.

    Your credit file is a record of your current and historic financial transactions and notes any adverse credit on:

    • Bank accounts
    • Loans that you have taken
    • Credit and store cards
    • Communication agreements such as your mobile phone
    • Mortgages
    • Utilities
    • Payday loans

    It will show your payment profile for each payment made, sometimes up to 6 years’ worth of data. Any payments that were made on time will be shown, along with any late or missed payments, such as mortgage arrears. This may well be enough for some lenders to reject your application, but not all of them.

    The next level is when a financial agreement remains unpaid and the lender has taken action. If a transaction did not get settled in a satisfactory manner, then it is not uncommon to see on the credit file:

    • CCJ
    • Default
    • Repossession

    Some borrowers may have also had to seek help with their financial situation. It is, therefore, also possible to see:

    • Debt Management Plan
    • IVA
    • Bankruptcy

    While bridging finance applications can be taken on an individual case basis by bridging lenders, there will be times when previous credit problems are seen to be more of an issue. If there is a sufficient gap since adverse entry or a plausible explanation, then there will still be a good chance that the lender will still accept you. They will, of course, still look to see if that adverse history could impact a repayment plan or strategy for a clean exit.

    Eligibility criteria for bridging finance

    Bridging finance lenders assess an application on a multitude of factors alongside their own unique criteria. They will also take into consideration the borrowers’ specific circumstances. Here are the main criteria you will need to meet for bridging finance:

    • Have a clear exit strategy, ie. plan for paying off the loan.
    • You must have collateral, such as property or cash, to be put up against the loan in case you default on repayments.
    • Most lenders will want to see a solid business plan that proves it is worth lending to you.
    • A proven track record will provide extra comfort to the lender.
    • Most lenders require a deposit, the value of which determines how much you can borrow.

    Bad credit bridging loan application process

    As with any application for short-term finance, there are things that you can do to increase your chances of being accepted for a new bridging loan. If you have a poor credit history, then being prepared is vital if you want a positive outcome.

    #1 Prepare documented evidence

    The first thing a lender will ask is to provide evidence of the information that you have given verbally. So get your documents together early in the process to speed things along.

    Pull together important documents like your proof of address and different proofs of ID such as your passport or driving license. Be prepared to provide copies of evidence of your income and bank statements. Proof of income in the form of payslips, SA302s, and company accounts can also be useful to show your financial standing and ability to service the debt as required.

    Many people have experienced credit problems in the past, but demonstrating an ability to repay in the future is important to any prospective lender. Remember, bridging loans are designed to be short-term, so your exit strategy alongside your financial standing goes hand in hand.

    #2 Check your credit file

    When was the last time you looked at your credit file? These days it is really important – and easy – to check with one of the larger credit reference agencies. Experian and Equifax can be easily accessed, or via CheckMyFile, where you can see a cross-section from 3 of the agencies.

    Your credit file may not be 100% accurate, so you will need to go over it with a fine-tooth comb before a lender does.

    #3 Consult an expert in bad credit bridging loans

    At One Commercial Loans, we only work with experienced specialists that have access to lenders who can offer flexibility in a multitude of situations. Bad credit bridging loans are one such area that we have experts in.

    Using a broker will often increase your chances of getting accepted for the loan because they can steer you toward providers whose criteria match your specific circumstances. This can save you considerable time and effort.

    Why choose One Commercial Loans?

    Our experts know bad credit bridging finance. The teams that work alongside us are selected because of their specialist knowledge in this area and the relationship they have with flexible bridging loan providers.

    We help clients with many different interests, including both commercial properties and residential property. Our enquiry process is quick, and you will be matched to a specialist broker who will assess your situation and present their solutions, finding the maximum loan available to you.

    To make an enquiry, please fill out our contact form, and we will be in touch.

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    About One Commercial

    One Commercial have over 100 years of property experience. At One Commercial we like to use a “one stop shop” approach, utilising the whole market to support our clients in a wide range of property related finance.Their job is to make sure that they have done the hard work by matching your situation to the right commercial lender and for the best deal.

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