refused finance due to affordability issues?
Bridging finance can present a real solution to those who are asset rich but lack liquidity, providing a quick injection of funding to finance acquisitions and expansions.
For example, we recently helped a client who required £1,000,000 to expand his business abroad. Funds were required very quickly so that the client could take advantage of a great business opportunity.
The client was a main shareholder in a listed company and owned a property worth £2.25 million with an existing first charge of £460,000. However, the client’s mortgage lender refused him finance due to ‘MMR affordability issues’.
As non-status lenders, we were not concerned with the client’s income, only the quality of the property that would be used as security for the advance. MTF was able to secure a second charge bridging loan, on an 18 month term at 66% LTV, on open market value.
The client was able to expand his business abroad, using the funds to pay for the initial operating costs and the 18 month term gave the client plenty of time to arrange and secure a business loan with a bank, in turn settling the bridging loan.
At MTF one of our defining characteristics is that we are non-status lenders. We don’t require evidence of trading history, accounts or proof of income. Instead we focus on the property and the client’s future plans. This allows us to take a practical, common sense approach to lending, to assist those looking to unlock the capital from their assets.
Our non-status approach is equally helpful when dealing with larger, high net worth applicants who occasionally have difficulty in obtaining a loan as a consequence of tax efficient structures employed by them. Such applicants often struggle to demonstrate their UK taxable income to a lender.
Individuals or off-shore investment vehicles, whose income streams can be erratic or is derived from multiple sources, fall into an unconventional space and fail to tick the boxes required by some lenders. We regularly assist clients in refinancing or releasing equity from properties where the holding companies are based in the British Virgin Islands, Gibraltar and Guernsey
If you would like to discuss a potential case, call us on 0203 051 2331 or fill in our online enquiry form for an immediate decision in principle.