This can be a game changer for property investors. Funds can often be secured within a matter of days, helping facilitate time-sensitive transactions.

But this access to swift and reliable cash can also help buyers to grasp investment opportunities too, such as purchasing a property below market value or securing assets at a discounted price, before refinancing or selling for a higher return further down the line.

In this article, we highlight some of the ways in which bridging finance can be used as a wealth management and creation tool.

Swift acquisition of high-value assets

Traditional financing methods can follow cumbersome processes which often don’t make them suitable for investors looking to take advantage of compelling property development opportunities. Application journeys can be incredibly time-consuming, taking weeks or months to finalise, but this is precisely where bridging finance and Cohort Capital can offer solutions.

Bridging loans are typically secured against the borrower’s assets and lenders are less concerned about factors like income than banks offering loans or mortgages. This means they can be approved far more quickly than other forms of finance.

However, at Cohort Capital we go a step further. Our customised approach to risk assessment means and use of internal capital means we can quickly fund projects that might be considered too unconventional or high-risk by traditional lenders. This enables investors to move quickly on a purchase and acquire undervalued assets that need a fast completion time at a favourable price.

The value of these assets can then be enhanced through refurbishment and renovation, which can help to increase the overall value of an investment portfolio. These refurbished assets can then be refinanced or resold for a higher price at a later date.

Our track record shows how adept we are at helping investors secure bridging finance quickly, often within a matter of days. In one recent case, we completed an £18.2 million loan on a superyacht in just 48 hours, demonstrating our ability to deliver fast, reliable, and efficient lending.

Increased liquidity and avoiding distressed sales

A key priority for many property investors is maintaining liquidity, which is essential for navigating market fluctuations and seizing any new opportunities that may arise. However, with so much wealth tied up in existing assets, cash flow problems or liquidity constraints can become a challenge.

Bridging finance helps address these problems by enhancing cash flow without requiring individuals to sell existing assets. In essence, it provides them with the financing they need to become a cash buyer and secure a lower purchase rate, as this can prove more attractive to vendors looking to swiftly dispose of an asset.

By leveraging existing assets for short-term funding, investors can protect their existing portfolio from disruption, protect asset value, and continue to build their portfolio as they wait for the capital appreciation on their assets to reach their full potential.

This can prove a particularly vital tool in a declining market which can sometimes force investors to sell assets at a lower price to cover shortfalls in funding. Bridging finance can act as a buffer, enabling investors to avoid distressed sales and preserve their wealth by helping them maintain control over assets until market conditions stabilise or improve.

Greater tax efficiencies

Of course, bridging finance is not solely used for property purchases – the funds raised can be put forward for a diverse range of purposes, including business needs or to pay a tax bill.

In fact, used wisely, bridging finance can act as a strategic tool which helps investors to manage the timing of any asset sales for tax purposes.

For example, using a bridging loan to delay a sale until a later tax year enables investors to manage their capital gains tax liability, make substantial tax savings and achieve a greater return on investment. In some cases, this could help preserve wealth and add value to portfolios.

Using short-term bridging finance as a funding mechanism can help investors achieve their long-term goals and place them in an ideal position to build and accumulate wealth, often without the need to restructure or sell existing assets within a portfolio.

If you have a client interested in exploring bridging finance opportunities and are looking for an experienced partner who can offer clear and accessible finance solutions in the form of high-quality secured loans, speak to our team.