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'Need for bridging loans rises in times of duress'
21 February 2008
In times of financial difficulty, bridging loans can prove a useful tool in staying afloat, according to one expert.
There is evidence that current economic difficulties as well as rising costs are set to affect Britons.
A recent survey by Engage Mutual Assurance revealed the 56 per cent of parents predict they will cut child-related expenditure.
And 44 per cent of respondents said they would struggle to make ends meet.
In this economic environment, bridging loans could be a way of meeting the financial needs in the period where purchasers have bought their new house but not sold the old one.
They are intended as short term loans and have high interest rates, but Lee Tillcock, editor of Business Moneyfacts said they have a use.
"In an environment where credit is harder to secure, bridging finance can perform an ever more important role, providing short term solutions while that ever-more-elusive long-term mortgage is finalised," he said.
