Providence Headlines

Many bridging lenders obtain their funding from institutional sources, typically from major banks or hedge funds. Whilst the rates at which they obtain this funding can be attractive the terms, conversely, can be quite restrictive. Strict covenants are often applied dictating the rules and parameters of all lending decisions. Such restrictions inevitably mean that certain clients with complex or unusual circumstances struggle to satisfy the requirements of more mainstream lenders.

Fortunately, there is now a small number of specialist bridging lenders with a more diverse funding base who are not reliant upon institutional backing. As a result, in situations where innovative solutions are required, these lenders can be more flexible and consider bespoke security structures. Indeed, they can even look beyond traditional property-based security – very useful if a client has insufficient equity in his property assets to satisfy a more conventional lender.

What forms do these specialist loans take? In truth they can be many and varied. In a scenario such as that mentioned above, where a client has insufficient equity in their property, it might be possible to look at other forms of security. Private Equity Loans can be offered to clients allowing them to use share options they hold as the principal form of security. These share options would generally need to be held in a FTSE or AIM listed company.

In such instances the specialist lender will take a ‘legal wrap’ around the options which effectively assign ownership of the shares to them if the loan defaults. As an additional comfort they will probably also still take a charge against the client’s property despite the high loan to value (LTV).

In addition to share options Investment Bonds will also be accepted by some lenders as an acceptable form of security. Once again specialist legal paperwork will be required to allow the bond to effectively become the principal collateral for the loan.

Apart from share options and bonds a diverse range of security can be used for Specialist Loans ranging from a business’s plant and equipment to a wealthy individuals privately owned assets such as cars, jewellery or even art. Prior to advancing a loan, the lender will carefully assess the assets to be taken as security to determine their value.

Given that loans where share options, a bond or other assets are used as the principal security invariably require specialist legal advice and paperwork it will come as little surprise to learn that they will generally be slightly more expensive than standard bridging loans. Despite this premium however they can be powerful tool for borrowers in situations where they would otherwise be unable to borrow the monies they require.

Still unsure and need to explore your options? Why not consult an expert?

At Central Bridging we have a diverse funding base that allows us to write Specialist Loans that many mainstream lenders with institutional funding will simply reject. We are a principal lender offering a range of loan facilities for business use from £100K to £2.5M (more on an exceptional basis) over periods from 3 to 24 months. Our loans are secured on freehold property across England and Wales.

Crucially you will always speak to a decision maker who will take time to understand you and your situation and unlike some of the bigger banks and lenders will then tailor a solution that best suits your needs.

Why not give us a call on 03332 400 506 for an informal chat about your options.

Media Contact
Company Name: Central Bridging
Contact Person: John Clifford
Email: Send Email
Phone: 03332 400 506
Country: United Kingdom
Website: https://www.centralbridging.co.uk