The more complicated your financial situation is, the more likely it is you will undertake complex financial transactions. As such, you might face delays and encounter problems along the way. These complications can mean that you have a gap in your finances, which can be very frustrating if you want to move quickly for strategic or investment purchases. Fortunately, bridging loans can be the ideal solution.
How can I use large bridging loans?
In recent years, large bridging loans have become an increasingly popular finance method. Bridging loans used for residential property are required to be regulated, giving you security in your facility. Whether you need to refurbish and renovate a space, wish to purchase a property before an expected cash influx or wish to buy another property before your old one has sold, a large bridging loan could be used to help you achieve your goals.
A bridging finance facility can be used to bridge gaps in your finances. However, these loans are not easy to arrange directly; we have a wealth of experience in this arena and can confidently liaise with lenders on your behalf.
What can I use large bridging loans for?
Enness Private Office has a clear history of using bridging finance creatively and innovatively, of finding solutions for clients who have been unable to solve their issues elsewhere. We have arranged bridging finance for projects as diverse as the purchase of a £2million country estate, a £12million facility to develop a historic building and the refurbishment of a luxury European villa.
We can also arrange international bridging loans, as we know, many of our clients are global investors with a worldwide portfolio of assets and business arrangements.
What rates can I secure for large bridging loans?
Enness Private Office has access to market-leading rates, ensuring you will always receive the best possible deal. Whether you have a residential, buy-to-let or commercial project in the works, a large bridging loan could be the ideal facility to help you complete.
The high value bridging finance market is best described as fragmented, specialised and one which can be complex. The specialist nature of this market means that very rarely will you come across a one size fits all solution. Bespoke high value bridging loans are commonplace, offering the chance to bridge a finance gap when acquiring property, undertaking a refurbishment or starting a new development.
What do we define as a large bridging finance loan?
The bridging finance market is very saturated and accessible in the £500-£750k range. This is many lenders sweet spot and is where competition is at its most intense. Borrowing over £1 million is an important transition, many more specialist lenders and private banks enter this space, so the range of options increases to the borrower. We would also expect to see a greater level of security available. Of course, the higher the bridging loan, the more acute the importance of pricing becomes. We, however, define high-value bridging finance as mortgages more than £3 million. Here the market is at its most discrete, the security is valuable, price sensitivity is at its highest, and the transactions are as a result more complex.
What does a large bridging finance loan cost?
There is no single way to answer this. Every case is individually negotiated on its circumstances, and the price is matched to the risk. We work with the widest panel of lenders, from global private banks to speciality funds. This access, coupled with our vast experience in this area ensures that we will find the best solution. Of course – price is not always the defining factor – speed, privacy, flexibility and confidence all are often just as important.
How long does it take to get a bridging loan?
This depends on the circumstances, the ability of the team involved and the borrowers prove expectations. We can have bridging loans agreed in a matter of hours. We can have valuations, and legal teams instructed on the same day. We manage the whole process as closely as possible to control all outcomes. Often, faster completions come at a higher price to the less urgent application, but this again depends on the circumstances. We will get everything completed as fast as we possibly can. Our record is 3 days start to finish.
Is bridging finance regulated?
Bridging loans secured against the property you do or have lived in are regulated. Bridging loans against commercial property, property development sites buy to let's are not regulated, but there may be reasons they are. This area is complex and in many circumstances, can be subject to interpretation. We are an FCA regulated mortgage brokerage so can offer clear guidance in this area.
How does bridging finance work?
Bridging finance is traditionally a short-term financial solution which allows the release of long-term value from an asset. This may be something as basic as covering a funding requirement between the sale and purchase of a home when timings overlap. It can also prove to be a useful short-term substitute for investment cash flow as an investor awaits funds from an asset sale.
One of the more common uses for bridging finance is to fund refurbishment/redevelopment of a property. This short-term funding will enable the refurbishment/redevelopment to be completed with an end valuation uplift far outweighing the cost of the bridging finance, including interest. The asset is then refinanced on its uplifted refurbished/redeveloped value, often on a significantly reduced rate of interest. Depending upon the type of investment and eventual uplift, the investor may even be able to bank a short term profit as a consequence of the refinancing.
Negotiating the best bridging finance mortgage
As we touched on above, the high-value bridging finance market is fairly fragmented and specialised. Thankfully, during our years of dealing in this market, we have built up beneficial contacts and access to funding which is not always in the public domain. While many will be aware of high profile bridging lenders, there are also discrete private banks which specialise in such transactions. We are also able to call upon hedge funds, private individuals and peer-to-peer lenders to create a degree of competition amongst possible financiers.
Vital elements of a bridging finance transaction
The legal process surrounding high value bridging loans can often be extremely complex, sometimes interacting with many other financial instruments. Legal agreements must be watertight, legally binding and explain in detail the terms of the transaction. Those who have come across bridging finance legal agreements will be aware that valuations, exit routes and security, form the basis of such deals.
Bridging finance is a short-term solution which if managed correctly, can help to release long-term value. The greater the level of security an investor can give the more preferential the terms and the more competitive the rate of interest. We can advise you on the type of assets which attract bridging finance companies, obtain realistic valuations and plan for achievable exit routes.
Securing bridging finance
We have access to an array of competitive bridging finance operations, legal advice to ensure everything is watertight and can assist with putting together an eventual exit route. Indicative pricing is readily available to those considering going down the bridging finance route together with advice on backup insurance applications. Having put together deals involving parties in different countries, an array of different assets and multi-million-pound funding, we have the experience, the know-how and the skills to put together a bespoke bridging finance proposal for you. Give us a call today to discuss your requirements in more detail and put together a no-obligation proposal.
How big is the million pound plus bridging loan market?
The market is challenging to define. Many of the large bridging lenders publish their figures, and there are several industry indexes which give an idea. However, the vast majority of bridging loans are private, individually negotiated and do not come from the obvious places. As a result, we do not think there will ever be an answer to this question.
Are bridging loans only available in the UK?
The UK bridging finance market is highly evolved and speciality. There are hundreds of lenders and a real sense of competition. International markets are less evolved, but there are options available.
