Natwest is one of the UK’s major banks, established in 1968 and now part of the Royal Bank of Scotland Group.
Due to their long history and brand awareness, many people seek the reassurance of using a high street bank like Natwest for bridging finance.
Does Natwest do Bridging Loans?
While we are regularly asked if Natwest offer bridging loans, they haven’t for some years now. In fact, few of the current high street banks still operate in the bridging finance market, this has largely become the province of alternative lenders.
If you are particularly keen on arranging business finance through Natwest, they do operate the alternative lending platform Esme Loans. Esme is aimed at SME’s and has now lent over £50 million to British businesses.
Which Banks Do Bridging Loans?
Very few of the major high street banks now offer bridging loans. Since the credit crunch of 2008, bridging has become the province of specialist lenders, including certain challenger banks.
The short term nature of this type of finance, combined with the relatively high risk, means that even those banks which do offer bridging do so largely for existing customers only, and usually then as something to support their mortage service.
Many people investigate their bank first for a potential loan simply because of an existing relationship, and because they carry a lot of historical trust. Rest assured, however, that all of the lenders on Business Expert are carefully investigated by us: we would never recommend you anything we hadn’t completed our own due diligence on.
How Much Does a Bridging Loan Cost?
The chief costs of bridging loans are as follows:
- Arrangement Fee – 2% of any loan is standard, although some brokers will reduce this to 1% for larger loan amounts.
- Valuation Fee – These vary depending on the location of the property, its size and complexity, and whether the valuation is in depth and on site or merely cursory.
- Exit Fees – Approximately 1% is standard
- Interest – This can be either monthly, retained or rolled up. Between 0.5% to about 1.5% is a standard range.
Are Bridging Loans a Good Idea?
Short term finance is expensive, leading many people to question whether a bridging loan is a good idea. The simple answer to this is yes, it is a good idea if you’re aware of the fees and risks and the finance can help you secure your goals. In most cases bridging works exactly as it is supposed to, meaning the borrower successfully exits the finance according to plan and within budget
How Does a Bridging Loan Work?
If you’re in need of a bridging loan, you approach a lender (or we could offer you a range of quotes) with your proposition. You’ll need to know how much you wish to borrow, over what timeframe, for what property, and with security to act as collateral.
The lender considers your request and, if terms are acceptable, offers you a quote. Once agreed, the funds can be mobilised extremely fast: one of the USP’s of this type of lending is its speed.
Do NatWest do Secured Loans?
Natwest do offer secured loans, often under the terminology ‘Homeowner loan.’ They claim to be able to make decisions within a single working day, with rates varying dependent on how much you want to borrow, and the level of your security.
Most Natwest secured loans are used for home improvements, and are capped at a maximum of 50k.
Is There an Alternative to a Bridging Loan?
The common alternatives to bridging finance are either a buy to let mortgage, or by releasing funds tied up in existing assets using a process known as asset refinancing.
Even invoice finance can be used, in some cases, as an alternative to bridging loans.
Also worth considering might be commercial loans, secured loans, or development finance.
Top Alternatives to Natwest for Bridging Finance
Here at Business Expert our remit is to get the best deal possible. With whole of market access to almost every lender on the UK market (and some outside it) we pride ourselves on offering fast, competitve information at the click of a button.
So if you’re after a bridging loan, just fill in our simple form and receive a range of quotes.