Bridging Finance vs Loans

Bridging finance is a relatively new concept to a number of people. It only started becoming a popular option in the last decade. Often confused with a loan, bridging finance is a unique solution to the financial needs of many. But let us explain….

What is a loan?

A loan in simple terms is ‘borrowed money’. Loans are characterised by charging interest which should be serviced on a monthly basis. The debt incurred by taking a loan should be repaid with interest within a set period of time. Loans are an option to those who qualify – if you have valuable assets and in need of some quick cash. Loans are regulated by the NCR, as with loans there are always a possibility of becoming over-indebted and you must be able to afford the loan.

What is Bridging Finance?

Bridging Finance is a financial transaction where you gain access to funds immediately based on a certain future income. One can also say you are discounting future money to an amount of money today. Typically that means you do not have to provide additional source of security for the transaction, as your future income is discounted in the form of a buy and sell agreement. That means you can NEVER become over indebted with bridging finance and affordability does not play a role either since you are selling something you already have.

What if you do not qualify for a loan, but have a settled RAF claim?

If you are a RAF claimant who has recently settled, accessing funds via a loan might have crossed your mind. The problem with typical loans are that you either need a salary or something else to offer as security for the loan. With bridging finance, the future income becomes the security and no monthly interest or admin fees are to be serviced. Bridging finance is a buy and sell agreement and very often a discounting fee applies that is only collected when the transaction comes to an end. Bridging finance ‘bridges’ the gap between your claim becoming settled, and the RAF making payment.

Bridging Finance with WeBridge

WeBridge takes the uniqueness of bridging finance a step further: WeBridge offers a fixed price for the claim that is bought, meaning there are no monthly discounting fees that accumulate.

Why is this good?

Keeping in mind the time we find ourselves in, there is no certainty as to when the Road Accident fund will start paying effectively. Therefore, when considering taking bridging finance, why not opt for an option that does not rely on when the RAF makes payment? WeBridge makes it possible for you to know perfectly what you selling and what we offering to pay for it – transparency at its best.
Take control of your finances and ask a consultant to work with you to alleviate immediate financial pressure in your life.