Bridging Finance NZ

Bridging Finance New Zealand.

Looking for bridging finance in New Zealand ? Want to know how and where to get bridging finance in NZ ? Through research and customer feedback loan nz has sourced out some of the best information, advice and bridging finance companies. Check it out, save time and money with Loan nz

What is Bridging Finance ?

Bridging finance is a method of financing. It is commonly used to offset your cash flow from a sale while you wait on cash from a purchase. In simple when you sell your car you might not receive the cash for a few months but you have bought another and had to pay for the new car in a month. You go to a lender to pay for the difference while you wait for the cash to come in.

Another type of bridging finance is Initial Public Offering ( IPO ) this happens when a company needs a ca[ital for an operational issue in the company. The Initial Public Offering will than sold shares of the company on the Stock Market to the public thus becomes a public Traded Enterprise. First there are two types of bridging finance :

Closed bridging – for this type of bridging finance you are sure of the date that you are going to repay the     finance, the lenders they find this type of arrangement to be less risky and the interest rates are low.

Open bridging – this type of bridging finance the borrower is not to sure as to when to repay the finance and the borrower first have to look for a buyer and its too much a risk for the lenders.

Bridging Finance New Zealand

One needs to really look at how much they have and how much they can afford to take out a bridging finance. These will all comes down to what you are after is it for a car , land or even your house. We will take a look at some of the options that are available  for us.

Bridging Finance

This product is usually available for constructions and property development due to their larger organizations  and they get regular finance from clients that purchases property from the developer

Bridging Loans

This one in particular is for companies and small clients due to the period ranges from 6 – 12 months at times extended to few years. If you are able to repay off the loan within the time frame of the agreed term often incurring mo exit fees

Asset Finance

They can give you cash in an instance provided you fill up a form online and the cash can be in your account in the next day even for personal loan or business. When you apply for a loan online it normally takes 10 minutes to process application and good thing it is free, just read the lending criteria .

Here the lenders will process application which include checking on your credits and any vehicle or land that is provided for security. At times when the lenders need clarifications  you will be contacted to visit their office and any documentation needed to be provided before signing of the loan documentation.

When every little details are cleared the money is sent to your bank account and you are all good to use them. After a while when you have payments for 50% of the loan you can apply for another loan.

For vehicles that are used for security must have no money owing to them, and the car have to be 1996 or newer and be roadworthy. If land the amount lend is determined by what the house is worth , how much is owe to the banks as mortgage. Need to provide copy of rates demand and mortgage balance. It be helpful but not required if you have a Registed Valuation.

This is the only way to secure that loan but if you don’t have one than a Guarantor can provide it for your loan. A friend or a family can be your guarantor to provide the security on your behalf.

Bridging Finance Repayments

Your repayments will be considered on:

  • How much you can afford on a weekly and/or fortnightly basis

  • Can start from as little as $25 but the amount has to be realistic taking into account the amount   of the loan taken.

  • You can also state how much you can afford to repay

  • For vehicle the maximum term usually takes 18 – 24 months and for land it can extend to 3 years

  • For loan amount repayment a $500 minimum payment of $30 and it defers depending on the amount you loan.

We are usually drawn to these kinds of arrangements and what they have to offer without closely looking at a bigger picture. Now we take a look at some of the advantages and disadvantages of bridging finance

Advantages of Bridging Finance
  • You can use your existing equity as your collateral in order to secure your new house , before selling your existing house.

  • If you are a self employed  there are options available to you for a home loan , require capital even when you want to expand or facing a shortfall of cashflow .

  • There are no guidelines or limits for bridging loans like for mortgages.The bridging loan can be granted by an underwriter on his own judgements.

  • Bridging loan are fast  and flexible in terms of TIME something we usually run out of. And can make a difference in securing new properties.

  • When facing problems on keeping up with payments you can get assisted to get back on track . There has to be a genuine reason like health , redundancy even unexpected death can all create financial stress.

  • Bridging finance can be use to fund both your houses on mortgage, construction as well as development consolidation.

  • You are provided with option to hold off fees until your sale is completed and have it added to the new mortgage, it helps in keeping the cost down.

Disadvantages of Bridging Finance
  • If you take out a loan for your new house and before you sold the original home you will have to pay both loans until you sell your home, for that you have two homes.

  • Bridging loans operates with high interest rate. If you have a delay payment deal for few months you still pay for the interest which will be more than price.

  • Fees can be expensive

  • Bridging loan covers maximum of 80% of new home value , the 20% have to be paid by you or from asset from the existing home.

  • You have to have enough equity to support both your property

  • You can be force to sell your property at a much lower price  ,interest can be charge to you for the entire amount of your new loan.

  • Since bridging finance is seen as a risky  for the lender you will be paying higher interest rates , and times it is difficult to find a bridging loan .

Bridging Finance Companies

ANZ

ANZ Bridging Finance can help you buy your new property while you are waiting on the sale of your existing property. They have very simple process in place where you can apply for bridging finance. You will need to provide all the relevant information and documentation and they will do the rest.

For more information you can check out their website

www.anz.co.nz

Bridging Finance Group LTD

 

  • Specialises in short term funding for individual and small business to borrow against equity held in properties.

  • Established to meet demands for fast financing when borrowers needs funds for sale of assets.

  • Bridging between property sale and purchase for house buyers , investors and property developers

  • Short term funding of capital for small businesses.

The main objective is provide you with that short term finance you need to complete your business.  You can repay the loan when your business is setup. They offer betweens 1 week – 1 year that is the maximum they can fund for. You need to provide

  • A registered valuation report

  • Evidence of balance of any loans secured by this security

  • Personal credit check

  • A defined loan repayments and exit plan

They are very fast in approvals and decisions, and will focus only on what security is provided and not on the reasons why you are borrowing. They are available to you for your questions and queries.

These companies vary in a much smaller ways but the main focus here before you decide is to understand the difference in Bridging Finance and Bridging Loans and when you can take one before deciding on the sale of property