17/09/2021
Bridging Finance – 3 Simple Steps
In an ideal world we would all like fair warning of events and for our plans to drop into place. Unfortunately, that is not always the case and sometimes we just need finance quickly – perhaps to secure property before others, or to purchase a dream home before our existing house has sold.
Here are 3 simple steps to help:
1. Do your research
Find a lender with suitable expertise that can act quickly. Make early contact and discuss the process and timescales. Lenders tend to specialize in the type of loans they like to make so it is important to find the right one that fits your needs or ask a broker to find one for you.
Questions to ask a lender:
• Does your loan fit their lending profile?
• What information do they need to make a yes/no decision?
• How quickly can they provide a loan offer?
• Do they have responsive lawyers who can move quickly?
2. Prepare your funding application
Package together all the information the lender will need to understand the proposal. They will want to know:
• How much you need, what you need it for, when you need it and when you will repay it.
• Confirm the borrowing entity (e.g., a person, a company) and provide some background on experience, relevant business interests, assets & liabilities, income and expenditure, etc.
• How you will repay the lender and what needs to be achieved to get to that point? What is your backup plan if that plan fails?
• Any unusual features to the proposal or third parties who are involved.
• Full details of the security and supporting evidence of value. Lenders will have maximum Loan to Value (LTV) criteria so is it always worth disclosing other security options that may provide additional or ‘makeweight’ security.
3. Be prepared (and patient!) to comply with a lender’s regulatory and due diligence requirements:
• Laws are set by government authorities such as the FCA, HMRC and the Home Office to protect you and society in general.
• Credit checks will be carried on all borrowers against all addresses occupied in the last 3 years. If you are aware of any adverse credit history then provide an explanation to the lender at the application stage.
• All lenders are legally obliged to comply with government anti-money laundering (AML) and know your client (KYC) regulations designed to prevent money laundering, terrorism and financial crime. You will need to produce photographic ID and address verification and other information such as source of funds and nationality.
• Ensure you have a good lawyer ready to act for you.
It can take many weeks to work through these steps especially if you have to apply online. Bridge finance from Bricks Finance avoids delays by meeting borrowers in person or via video calling to discuss and understand the proposal. In that way, we are able to provide a personal and very rapid service
