Get immediate cash flow for investments through home equity!
As the clear leader in high-value bridging loans in Singapore, with numerous awards in recent years, we understand the benefits of bridging loans and how they can help local Singaporeans with their cash flow.
What is a bridging loan?
A Bridging Loan is an asset-based, short-term loan designed to “bridge” the gap between immediate financial needs and longer-term funding options. Singapore bridging loans have gained popularity as a quick and flexible solution for urgent financial requirements.
Whether you are a property buyer, seeking real estate investments, or a business owner in need of quick capital, bridging loans offer easy and rapid access to funds. They are also referred to as bridge financing, swing loans, and caveat loans.
How do bridging loans work?
Bridging loans serve as a temporary financial solution, typically requiring repayment within a few months to a couple of years. These short-term loans are secured against valuable assets, such as real estate or other properties. Bridging loans offer a quick and versatile option for various needs.
In this case, we focus on using Singapore real estate as the asset to collateralize and access funding.
Bridging loan case study:
Singapore businessman is offered an opportunity to purchase a hotel for $5M, a significant discount from the book value of $10M, but needs funding within 30 days!
The client contacted GMG to explore how to use their landed property as a liquidity tool to access cash flow.
- Step 1. Assess the value of your Singapore real estate through an appraisal. For example, the property value in this case is $10M.
- Step 2. Arrange a private loan for 70% of the appraised value. In this case, $10M x 70% = $7M loan amount.
- Step 3. Any existing mortgage must be paid off first. For instance, say there is an existing mortgage with UOB for $2M: $7M loan amount – $2M existing mortgage = $5M net loan amount.
- Step 4. The client uses $5M to acquire the distressed hotel, immediately doubling its value to $10M: a 100% net asset value for the client!
How can you use a bridging loan?
- Property purchases: Bridging loans are commonly used in real estate transactions to secure dream homes while awaiting the sale of existing property, ensuring a seamless transition.
- Property development: Property developers use bridging loans to fund construction or renovation projects, enabling them to start promptly and capitalise on favourable market conditions
- Business expansions: Temporary bridging loans bridge cash flow gaps during business expansions and enable seizing growth opportunities
- Auction financing: Bridging loans can provide the solution for immediate funding that are required for auction purchases
- Opportunistic investments: Savvy investors use short-term Bridging Finance to take advantage of time-sensitive investment opportunities.
Why bridging loans?
Not only do bridging loans have a variety of potential uses, but they also offer unique benefits:
- Immediate access to funds
- Online application form
- Flexible repayment options (including interest)
- Increased liquidity
- Minimal required documents
- Smooth property transitions
- Free loan assessment
How can GMG help?
GMG offers exclusive opportunities with bespoke bridging funds:
- High loan-to-value (LTV) – funding of up to 75%, tailored to customers’ individual needs, which traditional banks tend to not consider
- Ease of qualification – focus on qualification based on property value rather than personal financials (e.g., age, income, and Total Debt Servicing Ratio (TDSR)) unlike with a bank bridging loan
- Speedy approval process – bridging loans are approved within 24 hours and funded in as quickly as 3 days.
GMG provides bridging funds not only within Singapore but also offers similar financing solutions in the United States, United Kingdom, France, Canada, Australia, Thailand, Philippines, and Hong Kong.