Prior to the financial crisis of 2008, short-term loans were widely available on the UK High Street. They were offered with various different names, but in all instances were basically bridging loans.
From Barclays to NatWest to HSBC, bridging finance for commercial customers and private borrowers was a fairly mainstream service.
Today, the short-term lending landscape is completely different. The overwhelming majority of mainstream lenders no longer offer bridging loans, or any comparable short-term facilities.
Even where commercial loans, personal loans and specialist secured loans are available, High Street bridging finance has all but dried up.
Why Did Mainstream Lenders Withdraw Bridging Loans?
The main reason for the withdrawal of bridging loans by most banks is the fact that prior to the financial crash, they were not particularly popular. At the time, it was comparatively easy to qualify for competitive mortgages, personal loans, and unsecured loans.
Such was the competition on the market that eligibility criteria were more relaxed than they had ever been. Customers had free and easy access to a huge range of products, with short-term and long-term options available for all requirements.
When the financial crisis hit, High Street banks immediately withdrew many of their products. They needed to focus their efforts and their resources on their most popular products and reduce risk by tightening their eligibility requirements.
As time passed and the economic picture improved, suspended services were once again introduced and qualification criteria gradually loosened. But as bridging finance had not previously proved a popular or a profitable venture, most mainstream banks chose not to reinstate them at all.
New Providers Emerge
This resulted in a huge gap in the market for those looking to take out strictly short-term loans in time-critical situations. Most types of personal loans, commercial loans and mortgages were once again available but nothing that could provide access to significant sums of money in a hurry, or for that matter a facility where prompt repayment is rewarded, rather than punished with penalty fees.
As demand grew for flexible and affordable short-term lending, the call was answered by a growing network of specialist lenders. Some of which were not particularly reputable at the sector’s dawn, when predatory tactics were often used to unfairly overcharge customers in need.
Slowly but surely, the sector grew and evolved into something much larger and more popular than anyone could have expected. There are now more than 40 specialist lenders in the UK offering bridging loans, which in most instances do not have a High Street presence.
The Face of the Sector Today
Over time, the involvement of regulators and the introduction of legislation made it increasingly difficult for predatory lenders to operate in the UK. Today, they have been practically wiped off the short-term lending map entirely.
There are still countless questionable payday loan providers in business, but the dangers of doing business with them are well known.
Elsewhere, the UK’s most established bridging specialists are providing an extensive range of flexible, affordable and competitively priced products for private borrowers and commercial customers. Funding everything from property purchases at auction to initial business establishment costs, bridging finance can be used for almost any legal purpose.
Best of all, it is one of few facilities currently available in the UK that does not discriminate against poor credit applicants. A low credit score is grounds for instant rejection on the High Street – irrespective of your broader financial status. With bridging finance, all applications are considered by way of their overall merit.
Bridging finance is no longer available on the High Street, but can be sourced more affordable than ever before from a vast network of specialist lenders.
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