The MillionPlus Private Finance team regularly hears from clients looking to arrange big, short term loans, commonly referred to as bridging loans. A bridging loan is a sum of money lent to cover a short time period between two transactions. Typically, this is the period between buying one property and selling another. Large bridging loans or million plus, short term funds can be required for a variety of reasons.
In 2017, bridging loans burst through the £3.5 billion barrier and the sector had its first £1 billion quarter. The sector is booming, fuelled by developers, prospectors and people who simply want to move quickly on a purchase or property deal and need million plus funds, fast.
At MillionPlus Private Finance, our specialism is bespoke lending, tailored to each individual, niche situation. Our network of lenders gives us breadth and scope to help clients in a variety of different short term lending situations.
This includes large international short term lending, large expat bridging loans, big commercial short term loans and million plus residential bridging mortgages.
Want to find out more? To discuss your large bridging or multi million pound short term loan requirements, contact the MillionPlus Private Finance team on +44 207 519 4950 email us at info@millionplus.com or complete our enquiry form.
An example of our work
Our client is a highly successful, multi-millionaire UK national who lives and works abroad but maintains his main residence in London. He approached our team looking to secure a million plus bridging loan to buy a second home and clear credit commitments.
The short term, large funding our client needed was a second charge bridging loan of £3.2 million, representing up to 70% of the current property valuation.
Despite being a high net worth individual, the client had found it challenging to find a big bridging loan for several reasons.
His million plus London home had an existing mortgage, and the relatively high loan to value (LTV) ratio required against the multi-million pound property was proving challenging for most large lenders.
Our client also has a complex income structure, as he receives income from his business in large, irregular, lump sums. His income fluctuates every year, meaning most mortgage lenders would not consider his application for a multi-million pound bridging loan.
This was despite the fact our client was due to receive a large payment from his business in the next 12 months, which would clear the balance of the million plus short term loan in full.
Our client’s partner is resident in the UK and does not have any income which could have been considered as part of the application.
All of the circumstances meant our client had encountered significant challenges in securing a large bridging loan.
The fact that the million plus loan was second charge, with a high LTV against a London property worth several million pounds, was challenging for most lenders.
Added to this was the way in which the million plus, short term bridging loan was due to be repaid. Large lenders our client had approached directly were not willing to accept the repayment of the loan as a lump sum from the client’s business abroad.
Solution
The MillionPlus Private Finance team reached out to a number of private short term lenders, with whom we have significant relationships.
Our understanding of complex lending situations and the need to create bespoke solutions meant that we could present the client’s case appropriately to a large bridging lender who accepted the high LTV and complex income structure.
Our clients were happy with the mortgage terms secured, and delighted to be able to fund the deposit for the purchase of their second home.
Deal Highlights
Loan amount:
LTV:
Term:
Type:
Loan purpose:
Lender’s arrangement fee:
Early repayment charges:
£3,266,806
70%
1 year
Interest rolled up
Raise capital and residential purchase
£65,336
5% of the total amount repaid- max charge could be £163,340*
*Charge incurred if all or part of the loan is repaid within 3 months from completion.
Notes
This case study is for information and illustration purposes only. The above example is for information purposes only and does not represent a recommendation to a suitable strategy.
Each mortgage case is assessed on an individual basis and there is no guarantee that the solution described here can be repeated in the future.
The value of property investments and income from them can go down as well as up and investors may not get back the amount originally invested.
As property is a specialist sector it can be volatile in adverse market conditions, there could be delays in realising the investment.
Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other loan secured on it.
The Financial Conduct Authority does not regulate some aspects of buy to let mortgages, overseas mortgages and tax advice.
