UK Bridging Loans
Short-term bridging loans can be quickly arranged on a completely 'non-status' basis, i.e. no accounts required, no income proof required and CCJ's / Defaults considered. A list of the applicants’ assets and liabilities will however be required and a firm source of repayment through either a property sale or and alternative offer of finance.
Residential property - Up to 80% of Open Market Value. Rate 2% per month. Any purpose.
Commercial property - Up to 70% of Forced Sale Value. Rate 2% per month. Any purpose.
If the loan requirement is less than the maximum stipulated above, then better terms may be available.
Case Study of Commercial Bridging Loan Refinance
A long-established Yorkshire based manufacturing business took out an expensive bridging loan to fund the following scenario:
- The business was losing money, and its clearing bankers wanted their overdraft back!
- The company needed to downsize and relocate in order to continue.
- The company owned a 2-acre site with old factory buildings on it.
As residential estates surrounded the factory site, the client obtained outline planning permission for 'residential' which hugely increased the value of the site to £2 million. The client arranged a bridging loan facility for 6 months of £900,000 at 1½% per month (18% pa), and a 1% arrangement fee.
This repaid the clearing bank and gave the client much needed headroom whilst it considered whether to:
- sell to a national House Builder
- do a joint venture with a Property Developer
The bridging loan was fast approaching maturity and needed to be renewed.
Sterling have now arranged to refinance the bridging loan with a specialist funder in the sector rather than renew with the existing lender. The following terms were obtained:
- base rate plus margin 3%
- interest roll up
- arrangement fee 1%.
By the end of the agreed loan term of 6 months the client will have finalised its plans for the site and saved in excess of £50,000 in interest!
© 2012 : Sterling Capital Reserve Ltd
Sterling Capital Reserve Ltd
Sterling House, 10 Wheatcroft Business Park, Landmere Lane, Edwalton, Nottingham NG12 4DG
Tel: 0115 984 9800 Fax: 0115 921 5550
ANY PROPERTY USED AS SECURITY, INCLUDING YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
EARLY REPAYMENT CHARGES APPLY. A BROKER FEE MAY APPLY.
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