The Benefits of Revolving Credit

Posted by Alternative Bridging Corporation on 20th March 2023 -

A revolving credit facility provides a bridging customer with access to funds without undertaking an application process every time they want to use the finance.

There are many circumstances in which this revolving credit facility can be extremely useful. For example, property developers often face challenges in securing the materials they need for their projects quickly, which can result in higher prices and negatively impact the bottom line of their projects. To address this issue, revolving credit facilities can play a crucial role in helping developers access capital at the start of their projects.

Alternative Bridging Corporation offers an innovative solution to this problem with its Alternative Overdraft product. This revolving credit facility can be drawn upon whenever required, allowing borrowers to draw, repay or reduce funds as needed. It eliminates the need for expensive setting-up charges each time a loan is needed and can be secured by a first or second charge on a residential or commercial property.

By using the Alternative Overdraft, developers can secure the facility on existing assets, enabling them to rapidly draw down to pay for raw materials when they start a scheme. This means they can stay ahead of price increases and manage the project within budget.

Alternative Bridging Corporation’s experience shows that it can take up to three months from drawing down the first finance to starting construction. This delay could potentially result in a significant increase in prices. Therefore, access to capital at the start of a project is crucial for developers, and Alternative Overdraft offers a solution that can help them achieve their goals.

Similarly, Investors who aim to acquire properties swiftly prioritise certainty. They require assurance that the funds will be obtainable without delay and will be accessible at the required time. Bridging finance may not involve the lengthy process of residential mortgages, but an application process must be completed, even for returning customers. Any delays could result in investors missing out on a valuable opportunity.

To mitigate this risk, Alternative Bridging Corporation’s Alternative Overdraft revolving credit facility provides liquidity whenever a borrower requires it. The facility can be drawn and repaid multiple times, making it an ideal overdraft for real estate, property auctions, site acquisitions, or work-in-progress funding.

A first charge over commercial or residential properties and a second charge over residential properties secure the flexible drawdown facility. The facility is available for two years and is subject to review, with interest charged on the outstanding balance that can be serviced or accrued. Loans range from £250,000 to £3m, allowing under-utilised assets to be used in the investor’s finance arrangements.

In today’s fast-moving environment, investors require various options to act quickly and decisively, and the Alternative Overdraft has already attracted significant interest from borrowers looking to secure properties. The days of missing out on a deal due to a long process are over, as this product gives investors immediate access to liquidity whenever required.