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Bridging Finance Basics

Bridging finance, sometimes referred to as high speed property finance, is a 'financial tool' used to raise funds against the value of a property. These funds can be used for any legal purpose,

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

maybe to purchase an other property or to raise capital for some other reason. Bridging finance is primarily for short term purposes - typically one or two months but can be for up to two years. Literally any residential

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

or commercial property which has provable value can be used to secure a bridging loan. Some of the main purposes to which bridging loans can be put:

Purchase of a residential or commercial property before the sale (

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

or re-mortgage) of an existing property.

Purchase of a property where speed is essential to clinch the deal

Funding can be arranged for property in need of substantial repair or refurbishment pending a lon

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

g term mortgage.

To avoid bankruptcy of other financial crisis by releasing the equity in a property.

Bridging loans can either be based on the “restricted sale value” of a property or the Open Market Val

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ue (OMV). The difference is simply down to the preference of an individual lender, a specialist commercial broker will be well aware of the difference and should ensure that this is made clear to the client.

Because the loa

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

n can be based on the Open Market Value of the property it is not at all unusual to see loans being arranged in excess of 100% of the purchase price. This is a major attraction to most property investors who are able to neg

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

otiate purchases well below market value. In the event that additional funds are required additional security can be used to “top-up” the loan.

How does it work?

A professionally prepared valuation report is the back

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

-bone of a bridging loan. Most bridging loan applications undergo relatively few background checks on the client’s ability to repay the loan, therefore the lender has to rely on the valuation for their security. Most bridgi

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

ng lenders will have a preferred list of surveyors so it is best to leave arranging the valuation to your broker.

Whilst waiting for the valuation report the lender will usually carry out their statutory checks on the applic

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

ant and be ready to issue the formal offer documents or facility letter when the valuation has been completed.

The exact process will vary from lender to lender, but in most cases once the offer has been issued and the valua

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

tion report checked the case is handed over to the solicitors who will then conclude the matter. It is vital that you obtain independent legal advice when arranging bridging finance. Your choice of solicitor will have consid

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

erable influence on how quickly the process can be completed. It is worth checking you local phone book for firms of solicitors who have a commercial department, these solicitors are mostly likely to have carried out this ty

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

pe of high speed transaction before. Most solicitors expect to take eight weeks or more to conclude property transactions, bridging finance is usually completed within two or three days of a satisfactory valuation report bei

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

ng received. (Obviously the author is not aiming any criticism at solicitors!)

Types of Bridging Loan

Whilst researching bridging finance you will come across the terms “closed bridge” and “open bridge”. In princip

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

le a closed bridge is where the 'exit route' or 'repayment source' is already arranged typically where contracts have been exchanged but the funds are not going to become available in time. On the other hand, “an open bridgi

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

ng loan” means that there is not a confirmed repayment method. As with most things financial, there is a grey area between the two. The most important things is to make sure you are arranging the right finance for your circ

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

umstances. This is where a specialist bridging finance broker is best placed to assist.

Bridging Finance in the UK

There are now more bridging finance lenders in the UK than there have ever been, so rates are coming

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

down and terms are becoming more flexible. When dealing with a bridging finance broker do not be afraid of asking for the terms of the loan to be explained in plain English. You will often be quoted a broker fee and a lend

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

ers arrangement fee. The interest rates and any repayment charges should be made clear at the outset.

As we said at the beginning, a bridging loan is a tool, and just like any tool it is extremely useful when used correctly

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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