Bridging Finance most commonly takes the form of a short term loan in
order to immediately gain access to necessary funds against future income. A
typical example would be where you have sold a house and are waiting for the
proceeds of the sale to come through. In the meantime you need money to pay
transfer fees and other expenses to secure a new property that you are buying.
This is where bridging finance comes in. The bridging loan is secured against
the future income from the sale of your property. Essentially, bridging finance
can thus be described as interim financing for a person or a business concern,
for a limited period until more long-term financing can be arranged, or until
other funds accrue. Bridging finance can also be used by people who need funds
while waiting for financial rehabilitation.
Bridging Finance in South Africa has shown massive growth in recent
years. A vast number of companies offering bridging finance have sprung up,
making it essential for those needing this type of loan to carefully choose who
to deal with. The interest on bridging loans is often higher than normal loans,
due to its short term nature and the immediacy of the need for it, so it is
vital to protect oneself against any form of abuse attached to loan offerings,
especially in a country like South Africa, where a large portion of the
population may find it difficult to secure more permanent loans, and relies on
bridging finance to make ends meet temporarily.
For these reasons, a bridging finance regulatory body was formed in 2007 -
the Bridging Finance Association of South Africa (BFASA). It has a code of
conduct for members covering ethical conduct, practice rules, consumer
accountability, professionalism and truth in advertising.
Various finance houses offer bridging finance in South Africa, and there is a
plethora of smaller companies offering, so anyone in need of this type of short
would do well to check out the market carefully, by contacting a reputable
financial service provider, or contacting BFASA.
Bridging Finance Companies In South Africa
Finance In Motion| Finance In Motion offers a quick and easy way to apply for bridging finance. Visit their website and fill in the online application form.2 |
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