With traditional forms of lending still hard to come by – despite government efforts to make finance more available from the banks – more Britons turned to short-term loans in the second quarter of 2013, according to figures from the Association of Short Term Lenders.
The ASTL saw a 16.9% increase in the number of bridging loans written in Q2, with a 5.3% growth in applications by number and a 15% quarterly rise in the value of those applications.
As a result, British short-term borrowers sought £1.28 billion in bridging loans in the quarter, a rise from £1.113 billion in Q1.
“The figures reflect the continuing steady increase I expected, revealing the ongoing need for bridging finance,” says ASTL chief executive Benson Hersch.
“This has not decreased despite pressure by government and promises by mainstream banks to lend more; as a result, short-term loans are filling the gap in many instances.”
With bridging loans offering a good degree of flexibility, the ASTL reports several different common reasons for accessing finance in this way – from bridging the gap between selling one property and buying another, to short-term funding for SMEs.
You might expect that, due to the nature of short-term loans, any substantial increase in the volume or value of applications might be short-lived.
However, the ASTL anticipates further growth in the coming quarter, with its members already seeing steady demand in the weeks so far.
For those looking to short-term loans due to a lack of longer-term lending availability, we offer this friendly reminder regarding repayment deadlines: “Like a bridge over a troubled quarter, you must pay it down.”