What Is Bridging Finance?
Bridging finance is ideal for those looking to raise funds in the short term. Generally speaking bridging finance is a cash advance that’s secured against future proceeds deriving from the sale of a property although there are packages available that will advance money to those who have been granted a new bond on an existing property, a second bond, or who have switched banks and are waiting for the new bond to be registered..
Not only do companies offering this service often provide a competitive rate, one of the biggest advantages is the turnaround time, mainly due to the fact that monies advanced in this manner are secured by the proceeds of the sale of a property.
Obviously, the time it takes to approve an advance of this nature will differ from company to company, but using a specialised bridging finance company will usually result in the money landing in your account a lot sooner than with traditional lenders.
It is imperative to deal with a reputable bridging finance company which will provide you as the client with a comprehensive quote, including a thorough breakdown of costs associated with the transaction. All admin costs should also be clearly laid out.
“We strongly suggest that those seeking bridging finance deal with a company that is registered with the Bridging Finance Association of South Africa (BFASA),” says Christo Jonker, sales and marketing manager, Prevance. “All the leading bridging finance companies in South Africa are members, and are obliged to adhere to a strict code of conduct.”
Jonker notes that one of the biggest dangers associated with raising finance through an bridging finance company that doesn’t enjoy a solid reputation within the industry is hidden costs. “Anyone who applies for bridging finance must ensure that the quote supplied contains a comprehensive account of all of the relevant costs in order to ensure there’ll be no nasty surprises further down the line.”
“At Prevance we understand that those who apply for bridging finance generally need to access funds as quickly as possible. Our product allows sellers access to as much as 75 percent of the nett proceeds before the actual transfer goes through. Our team prides itself on not only offering one of the most affordable bridging financing packages available, but our highly qualified, dedicated staff also strive to continuously deliver superior levels of professional service.
“We have always focused on building long-term business relationships with our clients and are extremely proud of the fact that many of our clients repeatedly use our services.”
Jonker adds that the company has gained a solid reputation for its ability to design and create new short term financial solutions as well as for its capacity to adapt to what’s really needed in the ever-changing market.
“It’s important to remember that different people have different needs, and as such those in search of pre-transfer finance need to work with a company which not only understands those needs, but which is in a position to draw up a personal proposal which will afford the client maximum benefits.”
Jonker notes it’s imperative to work with a company that specialises in the area of bridging finance. “Some legal firms have in-house bridging finance operations. Clients using this type of service need to be extremely cautious and understand that there may be a conflict of interest under certain circumstances.”
He says Prevance prides itself on the superior and unique financial solutions it offers, and which it believes has led to the company being regarded as a leader in the industry.
“We have been advancing clients much needed capital on their property transactions for 25 years and have gone from strength to strength during that time. We look forward to being able to help thousands more South Africans achieve their dreams for many years to come.”