Marcus Fitzpatrick

Marcus Fitzpatrick

The Role of Bridging Loans in Business Acquisitions

Business acquisitions present exciting opportunities for companies to expand their operations, diversify their portfolios, or even enter new markets. However, they often require significant capital upfront; this can be a challenge for even financially stable businesses. This is where bridging loans step in as a crucial financial tool that will allow you to facilitate the acquisition process.

Swift access to funds

Business acquisitions can be time-sensitive deals, and securing traditional funding from banks or investors might take longer than necessary. Bridging loans offer a quicker alternative, providing businesses with immediate access to funds. These short-term loans can be arranged relatively swiftly, enabling companies to seize acquisition opportunities as fast as they possibly can.

Covering acquisition costs

The costs associated with business acquisitions can be substantial, encompassing not only the purchase price but also legal fees, due diligence expenses, and other transaction-related costs. A bridging loan can be used to cover these upfront expenses, allowing businesses to proceed with the acquisition while they arrange long-term financing or wait for other funding sources to materialise.

Overcoming financing gaps

Sometimes, businesses might have secured long-term financing for an acquisition, but there could be a gap in funding due to timing misalignments. Bridging loans can bridge this financing gap, ensuring a smooth acquisition process without any delays or missed opportunities.

Property acquisitions and development

For businesses involved in property acquisitions or property development, bridging loans can play a vital role. Whether the business is looking to acquire new office space, retail property, or land for development, these short-term loans provide the capital needed to secure the property quickly. Once the acquisition is complete, businesses can explore long-term financing options or sell the property for profit if it aligns with their strategy.

Flexibility in terms

Bridging loans offer businesses more flexibility compared to traditional long-term loans. They can be customised to meet specific acquisition needs, such as tailored repayment schedules or interest-only options. This adaptability allows businesses to structure the loan in a way that aligns with their cash flow projections and financial goals.

Leveraging assets

For businesses with valuable assets, such as real estate or equipment, bridging loans can be secured against these assets to access higher loan amounts or obtain more favourable terms. This asset-backed feature of bridging loans reduces the lender’s risk and can result in lower interest rates.

 

Understanding Mortgages on Short-Lease Properties: A Comprehensive Guide

Purchasing a property with a short lease can present both challenges and opportunities. Although short-lease properties may come with a lower initial cost, navigating the complexities of obtaining a mortgage for such properties can be daunting.

What is a short lease?

A short lease refers to a property with a leasehold tenure that has a remaining duration of less than 80 years. The property’s value may be affected by the lease term decreasing; this could make the property less attractive to any prospective buyers. Understanding the lease length is crucial when you are assessing the long-term viability of the investment.

The impact of short leases on mortgage approval

Acquiring a mortgage on a property with a short lease can be challenging due to the heightened risks that are associated with diminishing lease terms. Lenders are often a lot more cautious when considering such properties. Their mortgage terms may also differ from properties with longer leases. We recommend that you be prepared for potentially higher interest rates or a larger deposit requirement.

Extending the lease

Extending the lease is a viable option for homeowners looking to secure a mortgage on a property with a short lease. A lease extension provides stability and increases the property’s value. However, the cost and process of extending the lease can vary depending on factors such as the property’s location and the remaining lease term. Seeking legal advice is advisable to understand the implications and expenses associated with lease extensions.

Enfranchisement and collective enfranchisement:

In some cases, leaseholders have the right to enfranchise or collectively enfranchise, allowing them to purchase the freehold or collectively acquire a share of it. Owning the property freehold can remove lease restrictions and provide more control over it. However, these processes can be complex and require cooperation from multiple leaseholders.

Lenders’ criteria and specialist lenders

Due to the unique risks of mortgages on short-lease properties, mainstream lenders may impose stringent criteria before they approve the mortgage. On the other hand, there are some specialist lenders out there who are more familiar with these types of properties and may offer tailored mortgage solutions.

Understanding the property’s investment potential

Although there are some challenges, short-lease properties can still present investment opportunities for the right buyers. Factors such as location, potential for lease extension, and the market’s demand for leasehold properties should be carefully considered. A well-researched investment strategy can lead to a profitable venture.

Common Myths about Second Charge Bridging Loans

Second charge bridging loans have emerged as a flexible and swift solution for borrowers who are looking for short-term funds. However, just like any financial product, there are many myths which often surround these loans, leading to confusion and uncertainty among potential borrowers.

Myth 1: Second Charge Bridging Loans Are Complicated and Time-Consuming

One common myth is that obtaining a second charge bridging loan is an arduous and time-consuming process. Contrary to this belief however, every type of bridging loan is designed to be more straightforward and faster to secure than a traditional mortgage. With a second charge bridging loan, the lender takes security against the property in addition to the existing mortgage; this reduces the risk and streamlines the approval process. As this financial product has minimal paperwork and fewer stringent requirements, borrowers can access funds more rapidly.

Myth 2: Second Charge Bridging Loans Are Exclusively for Individuals in Financial Distress

Another myth is that second charge bridging loans are only suitable for individuals facing financial difficulties. Many borrowers actually use second charge bridging loans strategically for property investments, renovations, bridging property chains and time-sensitive ventures where finance is needed quickly.

Myth 3: Second Charge Bridging Loans Have Unaffordable Interest Rates

Some potential borrowers may believe that second charge bridging loans come with exorbitant interest rates. While it is true that these loans typically carry higher interest rates than traditional mortgages, it is important to understand the reasons behind the rate differences. Second charge bridging loans are short-term solutions and lenders assume higher risks during the brief loan term. However, when compared to the potential gains or cost savings from quick property acquisitions or timely investments, the slightly higher interest rates may be justified.

Myth 4: Second Charge Bridging Loans Are Only for Residential Properties

Second charge bridging loans can be secured against various property types, including commercial properties, land and even mixed-use developments. The versatility of these loans makes second charge bridging loans an attractive option for property investors and entrepreneurs with diverse portfolios.

Myth 5: Second Charge Bridging Loans Are Only Offered by Banks

While most high street banks do offer second charge bridging loans, they are not the only providers. The lending market has evolved, and specialised bridging loan lenders have emerged, with UK Property Finance being one of many. Like other lenders we are able to offer tailored solutions that offer competitive rates and faster processing times. As we are a whole of market broker we are able to compare rates from all lenders across the UK and make sure you get the best possible deal.

Best Loans for Pensioners: Bridging the Financial Gap

Congratulations! You’ve reached the well-deserved phase of life called retirement, where you can relax, enjoy, and cherish the moments that truly matter. However, we all know that life can sometimes throw unexpected financial needs our way. Don’t worry; there are options available to help you navigate these situations. One such option that you might find useful is a Bridging Loan. Let’s explore what this loan is all about and why it can be an excellent choice for pensioners like you.

What is a bridging loan?

A Bridging Loan is like a friendly bridge that connects the gap between your current financial needs and your long-term funding sources. It’s a short-term loan designed to help you out when you need money urgently. For instance, imagine you plan to sell your house to buy a new one but need some extra funds before the sale is complete. A bridging loan could come to your rescue, helping you access the money you need until your house is sold.

Why bridging loans are great for pensioners?

There are lots of reasons why a bridging loan may be a great choice for a pensioner, and below we have compiled just a few:

Quick and simple: Getting a bridging loan is usually quick and straightforward. It won’t require you to go through complicated processes or wait for ages to get the funds. Time is precious, and bridging loans respect that.

No stressful monthly payments: As a pensioner, dealing with monthly repayments can be a hassle. The great thing about bridging loans is that you won’t have to worry about making monthly payments. You can repay the entire loan amount at the end of the loan term when your money from selling the property comes in.

Flexible repayment options: Bridging loans are designed to fit your unique situation. If you want to repay the loan earlier than planned, you can do that too. They give you the freedom to choose what works best for you.

Short-term relief: These loans are meant to be short-term friends, not long-term companions. You won’t be tied down by long repayment schedules, making your life more peaceful.

How do bridging loans work?

Getting a bridging loan is not rocket science. Here’s a simple breakdown of how it works:

Check eligibility: To get a bridging loan, you’ll need to show that you have a stable pension income or assets like a property you plan to sell. Don’t worry; you won’t need to do complex math or remember your entire financial history.

Borrow wisely: What you can borrow will depend on the value of the property you’re selling or the assets you have. The loan amount will be a percentage of that value.

Say hello to interest: Just like any loan, you’ll pay interest on the amount that you borrow. However, since it’s a short-term loan, the interest won’t pile up too much.

Goodbye loan, hello home: When your property is sold or your long-term funding source is available, you can happily say goodbye to the loan. Mission accomplished!

Using a Bridging Loan for Property Development

While there may be no shortage of specialist development finance products available in the UK, most are restricted to individuals with extensive experience and a well-established presence in the field. Something that can (and often does) count inspiring and ambitious newcomers out of the running

This is where bridging loans have the potential to offer a more flexible and accommodating alternative, issued almost entirely on the basis of available security and a feasible exit strategy.

How does a bridging loan work?

A bridging loan is a type of short-term financing, generally lasting between six months and two years. It’s designed to “bridge” the gap in funding that can occur during the purchase or development of a property, enabling the developer to keep their own cash as liquid as possible for the duration of the project.

The flexibility of bridging finance has made it a go-to option for a broad range of purposes, including:

The lender secures the loan against the value of the property or development, and once it is sold or alternative financing is secured, the loan is repaid in full.

Why is bridging finance a great choice for property development?

Ease and speed of access to funds are two of the biggest points of appeal with bridging finance, which can make a significant difference in property development.

Bridging loans, sometimes called property development loans, are designed to fulfil the needs of developers at short notice, allowing them to cover unexpected costs and take full advantage of time-critical purchase or investment opportunities.

Just a few of the potential benefits of bridging loans for property developments include the following:

Super-fast completions

Unlike traditional loans, which could take weeks or months to finalise, bridging loans, once approved, can be completed within a matter of days, sometimes just 72 hours. This is particularly beneficial in competitive business landscapes like property development, where time is of the essence.

Competitive rates

Monthly interest rates can be as low as 0.5%, making for unbeatable value for money when the debt is repaid early. Unlike longer-term loans, where compounded interest can quickly escalate, the short duration and competitive rates of a bridging loan keep costs down.

Flexibility

Unlike most conventional property development loans, bridging lenders do not impose heavy penalties for early repayment. In fact, most encourage early repayment to enable the borrower to save money.

No monthly repayments

The interest on a bridging loan is typically ‘rolled up’ until the end of the term, which means there are no monthly repayments to consider during the term of the bridging loan. This can significantly aid cash flow, particularly vital in property development where funds are generally tied up in the actual development.

Covers a range of expenses

From purchasing land to covering construction costs to renovation expenses, a bridging loan can cover a wide range of costs associated with property development.

Bridging vs. development finance

In essence, bridging loans mirror many of the features and benefits of specialist development finance, only with the added bonus of greater accessibility and flexibility. If you are able to provide your lender with formal evidence of the value of your property or project and a convincing exit strategy (how and when you intend to repay your debt), you have a higher chance of qualifying, irrespective of your experience in the field.

Plus, whereas property development finance is released in a series of stages tied to the completion of major project phases, the full balance of a bridging loan is transferred to the borrower in a single lump sum.

This alone can make it a preferable option for many property developers, who would prefer not to have to wait for subsequent instalments to be released.

How Does Probate Advance Work

Inheriting assets in the wake of bereavement can sometimes feel more like a curse than a blessing. The UK’s approach to probate loans and inheritance taxation is notoriously complex.

Getting your inheritance can sometimes turn out to be more of a headache than a windfall, especially when the process involved, known as probate, gets drawn out over weeks or even years.

But what if there was a way to access a portion of your inheritance upfront without having to wait for the seemingly endless probate process to finish?

Potential problems with the probate process

After the passing of a loved one, the last thing anyone needs is a raft of legal and financial complications. Unfortunately, probate brings both into the mix. and in no small measure.

Difficult at the best of times, the process can get dragged out further due to disputes over the will, outstanding debts, property sales, or simple administrative delays. During this period, rightful beneficiaries may find themselves facing a dead end, unable to access the inheritance due to them.

Introducing probate advance

While such circumstances can leave you feeling helpless, there is a solution that can offer some relief: a probate advance. This bespoke service enables beneficiaries to receive a portion of their inheritance early, usually within a couple of weeks at the most.

Probate advance, also known as inheritance advance or estate advance, is a swift and affordable way to access some of your owed inheritance without waiting for the probate process to finish. It is essentially a secured loan, wherein the assets you are owed are used as collateral for the facility.

You may be able to access anything from 60% to 80% of your owed inheritance in advance, at the cost of a low monthly rate of interest in the interim.

How does probate advance work?

The process of obtaining a probate advance loan is fairly straightforward, consisting of the following steps:

  1. Application: The process begins by applying for a probate advance with a reputable company, ideally via a specialist broker. The application usually requires minimal paperwork. Typically, a copy of the death certificate, a will, if applicable, and some basic identification
  2. Evaluation: The lender will then assess the estate and perform due diligence. They will validate your inheritance claim and the value of assets in the estate.
  3. Agreement: Once verified, the lender will offer you an advance, typically a percentage of the inheritance you’re owed. You’ll receive a contract outlining the terms and conditions.
  4. Transfer: After the contract is signed, the advanced amount is wired to your bank account within a few days, which you are free to use as you wish.

The benefits of probate advances

Sourced from a reliable and reputable provider, a cost-effective probate advance can offer a broad range of benefits.

Examples of these include:

  • Fast Access to Funds: Probate Advance provides you with immediate financial relief during a challenging period, thereby reducing financial stress.
  • No Repayment Obligations: Unlike a conventional loan, there’s no obligation to repay the sum before you gain access to your inheritance, which makes it an attractive option for many beneficiaries.
  • Credit Status is Not an Issue: The advance does not depend on your credit score or financial history. The main matter of importance is the value of the inheritance you are set to receive.
  • Avoids Family Conflicts: As every beneficiary can apply for their share, it prevents potential family disputes over access to the inheritance.

Making the right decision

Choosing the right financial support during a particularly sensitive time can be challenging, but it is important to consider all available options before making your decision. While probate advances offer a fast, flexible, and affordable solution, it’s crucial to balance this against any potential costs or drawbacks.

Your aim should be to ease financial stress during a difficult time, not add to it. Precisely the input and support of an experienced broker can prove invaluable. Along with helping you choose the ideal products to suit your requirements, your broker will pair your case with the best available lender and negotiate hard to ensure you get an unbeatable deal.

For more information or to discuss the potential benefits of probate advance in more detail, contact a member of the team at UK Property Finance today.

How Using a Finance Broker Can Save You Time and Money

One of the oldest but most universal rules in the book when it comes to good business is to always, where possible, cut out the middleman. By going directly to the source, you will usually find that whatever it is you need, you can save money on it or at least get a better deal.

Hence, there is a tendency among businesses and entrepreneurs to take their requirements directly to lenders.

All of which seems logical on the surface but can, in fact, prove quite a costly mistake. Where independent finance brokers are concerned, what you’re looking at is one of the few true exceptions to the above rule on cutting out the middleman.

When you apply for business finance of any kind using a finance broker, you could save yourself a lot of time, effort, and even money.

How can the involvement of a third party ever prove genuinely cost-effective? By bringing you and your business the following benefits, among others:

They know the available products inside out

Unless you have been working in the financial service sector for decades, you cannot expect to know and understand the full scope of funding solutions available.  Consequently, you may not know which of the products up for grabs is right for you.

By contrast, brokers who live and breathe commercial finance can help pair your requirements with the exact product you need. Often created from scratch as a bespoke solution, which you may not have realised was a viable option.

They can access exclusive deals and discounts

An experienced broker will work with an extensive panel of approved lenders, many of whom may not offer their services directly to clients. It is not uncommon for specialist service providers to issue finance exclusively via broker introductions, which means that working with a broker is the only way to access their products.

This is something that can pave the way for exclusive deals and discounts, the likes of which would not otherwise be accessible. A broker can compare and contrast offers from the largest possible network of lenders, ultimately translating to a better deal for you.

They can provide 100% objective information

The beauty of working with an independent broker lies in the fact that you also gain access to 100% objective and impartial advice. When you take your business directly to a lender, you cannot expect them to be completely honest. Even if they know you would be far better off elsewhere, they will attempt to win you over with their sales pitch.

With an independent broker, the information you receive is free of bias. They have no direct ties or affiliations with any specific brand, enabling them to provide objective advice you can count on.

They can negotiate on your behalf

Hiring a finance broker grants you access to their advanced negotiation skills. Your broker will take charge of negotiating on your behalf to ensure you get the best possible deal. This is something they do as a profession, putting them in a privileged position to support your business.

From interest rates to borrowing costs to terms and conditions, your broker will ensure all aspects of the agreement reached are amicable and affordable.

They won’t charge you a penny for the privilege

If all this wasn’t enough, the fact that all good property finance brokers offer their support 100% free of charge means you really have nothing to lose. There is nothing to pay at any time, nor are you under any obligation to follow their advice.

Effectively, working with an independent broker combines the benefits of speaking to an experienced financial advisor with those of hiring a skilled negotiator. All without having to pay a penny for the privilege, irrespective of whether you go ahead or walk away.

Can I Get a Small Inheritance Advance

It can be more than a little frustrating when you are counting on an inheritance that is rightly yours, but the probate process seems to drag on endlessly. Even today, bringing all legal, and financial matters to a swift conclusion in the wake of the death of a loved one can be surprisingly (and disappointingly) complex.

Not to mention, cripplingly expensive.

In such circumstances, a small inheritance advance could be the lifeline you need to navigate these complications. But how exactly does an inheritance loan work, and who is eligible for such facilities?

What is a small inheritance advance?

A small inheritance advance, also known as an inheritance loan or probate advance, is a financial product that allows heirs, and beneficiaries to access part of their inheritance money, before the conclusion of the probate process. Instead of waiting for months (or even years) to receive your inheritance, an advance offers immediate access to a percentage of your entitled assets.

Lenders typically cap their maximum loan amounts at 60% to 80% of the total value of the assets you own, which means you could gain access to a significant sum of money much faster.

Who could benefit from a small inheritance advance?

Anyone who needs (or wants) to gain access to their inheritance prior to the completion of probate could benefit from a small inheritance advance. Potential applications for such funds are limitless, but common uses for probate advances include:

  • Immediate financial needs: If you have urgent bills to pay or time-critical costs of any kind, an advance could be a useful option.
  • General purchases: You may also simply want to gain access to the funds that are rightfully yours to purchase a car, pay for a holiday, invest in a second home and so on.
  • Debts and obligations: The funds from an advance can be used to settle debts, business bills, or other major expenses.
  • Investment opportunities: An opportunity for a good investment might not wait for probate to conclude, and an inheritance advance may just provide the needed funds.

In short, a small inheritance loan can be used for any legal purpose, with no specific restrictions imposed.

Eligibility for a small inheritance advance

Requirements vary significantly from one lender to the next, but the following generally apply in all instances:

  • Probate must be open: For a beneficiary to qualify, probate on the decedent’s estate must have begun.
  • Verification of inheritance: You must show proof of your rightful claim to an inheritance.
  • Proof of Inheritance value: The advance is typically a percentage of the inheritance value.
  • Aged 18 years or over: Though there is typically no upper age limit.
  • Good credit: Some lenders will only accept applications from individuals with a good credit score.

Along with the above, there are several potential complications that can hinder a probate advance application, or render an applicant unviable. Examples of these include:

  • Insufficient estate value: Only beneficiaries who stand to receive a substantial amount can usually qualify.
  • Not all estates are eligible: Some types of assets and other issues may disqualify the estate.

You must also be able to meet the required costs of a small inheritance advanced, which along with the agreed rate of interest may include an arrangement fee of around 1.5%.

Why use an independent broker?

An inheritance advance can offer a lifeline in a period of concern and complexities.

Using a reputable independent broker to secure a small inheritance advance can ensure you get the best possible deal while offering the objective advice you need to make an informed decision. They can provide different options from various lenders (some of which do not work directly with borrowers), helping you make a well-informed choice and negotiating on your behalf.

For more information or to discuss the potential benefits of inheritance advance loans in more detail, contact a member of the team at UK Property Finance today.

Can I Get a Small Inheritance Advance?

It can be more than a little frustrating when you are counting on an inheritance that is rightly yours, but the probate process seems to drag on endlessly. Even today, bringing all legal and financial matters to a swift conclusion in the wake of the death of a loved one can be surprisingly (and disappointingly) complex.

Not to mention, it is cripplingly expensive.

In such circumstances, a small inheritance advance could be the lifeline you need to navigate these complications. But how exactly does an inheritance loan work, and who is eligible for such facilities?

What is a small inheritance advance?

A small inheritance advance, also known as an inheritance loan or probate advance, is a financial product that allows heirs and beneficiaries to access part of their inheritance money before the conclusion of the probate process. Instead of waiting for months (or even years) to receive your inheritance, an advance offers immediate access to a percentage of your entitled assets.

Lenders typically cap their maximum loan amounts at 60% to 80% of the total value of the assets you own, which means you could gain access to a significant sum of money much faster.

Who could benefit from a small inheritance advance?

Anyone who needs (or wants) to gain access to their inheritance prior to the completion of probate could benefit from a small inheritance advance. Potential applications for such funds are limitless, but common uses for probate advances include:

  • Immediate financial needs: If you have urgent bills to pay or time-critical costs of any kind, an advance could be a useful option.
  • General purchases: You may also simply want to gain access to the funds that are rightfully yours to purchase a car, pay for a holiday, invest in a second home, and so on.
  • Debts and obligations: The funds from an advance can be used to settle debts, business bills, or other major expenses.
  • Investment opportunities: An opportunity for a good investment might not wait for probate to conclude, and an inheritance advance may just provide the needed funds.

In short, a small inheritance loan can be used for any legal purpose, with no specific restrictions imposed.

Eligibility for a small inheritance advance

Requirements vary significantly from one lender to the next, but the following generally apply in all instances:

  • Probate must be open: For a beneficiary to qualify, probate on the decedent’s estate must have begun.
  • Verification of inheritance: You must show proof of your rightful claim to an inheritance.
  • Proof of inheritance value: The advance is typically a percentage of the inheritance value.
  • Aged 18 years or older: Though there is typically no upper age limit,
  • Good credit: Some lenders will only accept applications from individuals with a good credit score.

Along with the above, there are several potential complications that can hinder a probate advance application or render an applicant unviable. Examples of these include:

  • Insufficient estate value: Only beneficiaries who stand to receive a substantial amount can usually qualify.
  • Not all estates are eligible: Some types of assets and other issues may disqualify the estate.
  • You must also be able to meet the required costs of a small inheritance, which, along with the agreed rate of interest, may include an arrangement fee of around 1.5%.

Why use an independent broker?

An inheritance advance can offer a lifeline in a period of concern and complexity.

Using a reputable independent broker to secure a small inheritance advance can ensure you get the best possible deal while offering the objective advice you need to make an informed decision. They can provide different options from various lenders (some of which do not work directly with borrowers), helping you make a well-informed choice and negotiating on your behalf.

For more information or to discuss the potential benefits of inheritance advance loans in more detail, contact a member of the team at UK Property Finance today.