More businesses are turning to bridging loans in order to overcome their cash flow problems, an industry insider has said.

Chris Baguley, managing director of Bridging Finance Limited claims that in the current climate, developers were focusing on small, low-risk deals rather than looking to finance large ones.

He went on to say that these smaller transactions were being completed in great numbers as the confidence of lenders and developers regarding high-risk projects remained low.

"I think that the various applications of bridging finance are shifting slightly in prominence. We are seeing more businesses using bridging finance for purposes such as refinancing their existing banking facilities or overcoming glitches in their cash flow," he said.

Datamonitor estimated in 2006 that bridging loans accounted for £1.2 billion in balances outstanding and £2.5 billion in gross advances.

Bridging loans are short-term loans, sometimes taken out buy homeowners who plan to buy another property before they have sold the first.

Source:
http://www.bridgingandcommercial.co.uk