Bridging loans 'helping manufacturing sector'
Tuesday March 4th 2008
Bridging loans are becoming increasingly important in the manufacturing sector, as banks and long-term mortgage lenders prove reluctant to take on increased risk, according to TheManufacturer.com.Citing the most recent Confederation of British Industry (CBI) quarterly SME trends survey, the site claimed that the credit crunch was posing major problems for the manufacturing industry – and bridging lenders were responding.
The CBI Index showed 78 per cent of UK manufacturers predicting reduced demand due to the strains of the credit crunch, while rising interest rates made credit harder to come by and threatened to put ambitious projects on hold.
Chris Baguley, managing director of Bridging Finance Limited, told TheManufacturer.com: "Accountants and other professional advisers are increasingly recommending to their manufacturing clients that a bridging loan is a good option to ease the pressure until long term finance can be arranged.
"Typical reasons cited for the loan, as well as to ease cash flow, are to acquire new machinery, new premises or to pay off tax bills."
He added that Bridging Finance Limited had seen a 27 per cent increase in the number of instructions registered this year compared to last – and suggested that the trend was shared by many bridging lenders.