I recently secured an extremely fast bridging loan for a couple’s main residence in order to raise funds to put towards a new business venture. My clients had an existing mortgage of £154,000 on their property. They were looking to consolidate and draw out additional funds. However, as they had an investment opportunity, they needed the funds in their bank account within just two weeks. This was nearly impossible for almost every lender.
Aside from the speed required, there were a few other challenges I faced with this case. Firstly, most high street lenders will not allow capital raising for a business at all, let alone within such a short timeframe. On top of this, only one of the applicants had a source of income; he was self employed but he had not yet been working for a full year, which does not fit with the majority of lenders’ criteria.
My clients also wanted the facility for a year because he had a very profitable business project coming up. They intended to use the proceeds to pay off the bridging loan. It was very important, therefore, to have no early repayment charges attached to the loan.
I knew that no conventional lender would be willing to accept this case, and even if they were happy to offer a second charge loan, it would prove too long a process for the quick schedule we were up against. Along with this, most lenders will charge over 1% a month for business purposes.
I was able to source a specialist lender willing to accept the case, meaning I managed to get the whole amount drawn down in just 2 weeks. This came with the interest rolled up so there were no monthly payments which, at just 0.99% of the loan amount per month, was an extremely cost-effective way of securing the finance my clients needed until his business project paid off.
I secured a £220,000 loan at a rate of 0.99% a month, fixed for 1 year. My clients were delighted with this solution.