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Starting A New Business: Best Ways To Raise Finance

Raising finance is one of the biggest challenges that many new businesses face. Moreover, if you have big plans for the future, you may even require additional funding. For example, this may be as simple as boosting production or an ambitious step, such as buying another company. Regardless of your goals, there are many different ways to seek funding, which don’t always mean you need to rely on traditional avenues, such as banks. The most appropriate funding option for you will be determined by your circumstances, including the size of your company and the nature of your growth plans. This article will find some of the best ways to secure financing for your new business.

Bootstrapping Your Business

Self-funding, also known as bootstrapping your business, is an effective way of financing, especially when you’re just starting out. It is common for first-time business owners to have difficulties securing funding without showing some traction or a plan for growth. As a result, many entrepreneurs invest from their own savings and ask their family and friends to contribute. This is normally easier to raise, as there will be fewer formalities and compliances to consider. Bootstrapping your business may be a good funding option if the initial requirement is small. However, if you need money from day one, you may want to consider other solutions.

Bridging Loans

Bridging loans can be used by businesses to cover their funding requirements in a variety of situations. They’re designed to be used in limited circumstances and typically in anticipation of a business receiving long-term funding. Advias is an experienced and reputable financial advisor who specialises in bridging finance, development finance, and premium mortgages. Thanks to their in-house analysis tools and extensive database of lender contacts, they can deliver accurate solutions in a timely manner. When it comes to starting a new business, bridging finance can help fill in the gaps and ensure that all necessary purchases can be made to kick-start the process.

Crowdfunding

Crowdfunding is a way of raising finance, which involves asking a large number of people to each invest a small amount of money. There are several different types of crowdfunding, including donation, equity, and debt. Donation crowdfunding means that people are willing to donate money to your enterprise simply because they believe in your vision and goals and will want nothing in return. Equity crowdfunding refers to people who invest in your business in exchange for shares and a stake. Finally, debt crowdfunding means that people lend you money, which they expect to receive back with interest.

To find out more about how we can assist you with your Bridging Finance requirements, please click here to get in touch

Credit Cards

Business credit cards are some of the most readily available ways to fund a new business, as they offer a quick way to get instant money. This may be a good funding option for you if you have just opened your business and don’t have many expenses. You can use a credit card and continue to pay the minimum payment. Nevertheless, remember that interest rates and costs associated with credit cards can build up very quickly. As a result, if you don’t use your credit card responsibly, you may accumulate debt, which can damage your business owner’s credit.

Business Grants

Your business may be eligible for a small business grant, which can help you cover certain types of expenditure. Take a look at the business finance support, that is available for start-ups and other small businesses. It can cover things such as the cost of premises, IT equipment, and machinery. Each grant will require a different application process, including strict qualification criteria. While there is no guarantee that you’ll be eligible, it’s still worth exploring your options, especially if you have just started a new business.

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Angel Investors

Angel investors are typically high-net-worth individuals who invest in businesses during the early stages of their development. Usually, investors use their disposable finance to provide equity finance to a company. In exchange, they will normally take shares in the business and express an active interest in the company’s growth. Therefore, they must believe in the business and in you. In addition, angel investors will support you with their knowledge and expertise so that they can see a strong return on their investment within three to eight years.

Venture Capital

You may consider a venture capital firm if you need a serious amount of money in exchange for a big percentage of your company. However, this is a competitive area, so you will need an outstanding strategy, as well as a great business plan and an impressive pitch. In general, a venture capital investment may be suitable for small businesses that have moved past the start-up phase and are already generating revenue. Keep in mind that this may not be the best option for you if you’re not interested in mentorship and compromise.

By Sam Allcock

Source: Business Mole

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What Can Bridging Loans Be Used For?

Bridging Loan Uses

Sometimes you might need to access money quickly to buy a property and you cannot wait for the lengthy process of a mortgage application or a house sale, so you look for alternative finance options. One solution could be to borrow money from someone you know but if that is not an option, the next consideration is usually to apply for a Bridging Loan.

To find out more about how we can assist you with your Bridging Finance requirements, please click here to get in touch

What is a Bridging Loan?

A Bridging Loan is a short-term finance loan that can be used for a number of different reasons. It is commonly used to buy a property while an existing property is in the process of being sold but will not go through in time for the money to be available. It could also be used when someone buys a house at auction and they do not have the time to get a mortgage as they need to pay the seller quickly.

Another reason someone might choose to apply for a bridging loan is if they want to pay for urgent renovation work while they wait for a remortgage application to go through. Bridging Loans are frequently used by Property Investors but people who are not investors can also use it if they are in a situation that requires quick finance.

Types of Bridging Loans

There are two types of Bridging Loan:

Closed Bridging Loans

Closed Bridging Loans have a fixed date for the loan to be repaid. Typically, this will be used if you have exchanged contracts and are waiting for your property sale to complete. It may be that there has been a delay that means your mortgage loan is not ready yet. With this type of bridging loan, the lender will want to know exactly how you are going to repay the loan, for example, through sale of your property.

Open Bridging Loans

With an Open Bridging Loan there is no set date for repayment but most lenders would require it to be paid within a year, as it is only ever intended to be a short term finance solution. When you take out a bridging loan, you do not have to have a specific exit plan, such as the sale of a property.

Bridging Loans will usually have higher interest rates that standard loans, due to the quick solution that they provide. They are often referred to as gap financing because they are filling the gap until another finance option is available.

Who can use Bridging Loans?

Bridging Loans can be used by individuals or by businesses, provided that they meet the required criteria. Some Bridging Loans will require the applicant to have some type of collateral as part of the loan agreement, such as property.

How Businesses use Bridging Loans

Businesses often use Bridging Loans for reasons other than buying commercial property via a Commercial Bridging Loan. They sometimes use it to cover costs such as paying tax bills while waiting for another finance solution. Some business owners use a bridging loan to purchase another business in a takeover, or they might cover the costs of a development project.

Bridge Loans for Property

In some situations, a homebuyer may need to take out a bridging loan to pay for their new property while they wait for their existing property sale to go through. If there is a delay in the sale, to avoid their purchase falling through, they can arrange bridging finance to ensure it goes through.

There are fairly strict lending criteria for this type of bridging loan use and the applicant would have to have excellent credit ratings as well as a low debt-to-income ratio. Another part of the criteria that lenders usually require is that the bridge loan is only up to 80% of the combined value of the two properties, which means that the applicant must have a large amount of equity in their property.

If the applicant does have a bridging loan approved in this type of scenario, the mortgages for the two houses are rolled together.

Property investors and Bridging Loans

Many property investors use Bridging Loans to enable them to build up their property portfolio. When they are buying property at an auction, a quick way to finance the purchase is through a bridging loan but they also use bridging finance to buy properties on the market too. Often, property investors will need property purchases to go through as quickly as possible so that they can get tenants into rented property.

Another way that property investors sometimes use Bridging Loans is if they want to buy a property and refurb it and then sell it on for a higher value than they bought it for. This process is called flipping and a short-term loan is ideal as once the property is purchased, they will spend a few months on the refurbishment and then quickly sell the property on.

Experienced property investors are usually quite likely to get approved for a bridging loan because they will have accumulated a lot of collateral in their property portfolio.

How does a Bridging Loan work?

The way that a bridging loan usually works is that a ‘charge’ is placed on your property. This ‘charge’ is a legal agreement that determines which lenders would get paid first if you were to miss payments on your loan and fall into arrears. If you own your property, then the bridging loan would be your first charge but if you still had a mortgage on your property, the loan would be a second charge.

If you are unable to make the payments on your bridging loan, your property could be sold to pay the loan back to the lender.

Is a Bridging Loan expensive?

Generally, a bridging loan will cost more than a standard mortgage because it is a short-term arrangement and the lenders will want to make enough money from the short period of interest to make it profitable for them.

The fees are usually charged on a monthly basis, rather than an annual basis due to the loans usually only running for a number of months. A monthly fee might be somewhere between 0.5% and 1.5% per month, costing considerably more over a year than an average mortgage interest rate.

When you take out a bridging loan, you will also need to consider that there will be a set-up fee for the product, which will be around 2% of the loan, which can obviously end up being a very high amount if you are taking out a large bridging loan.

How much could I borrow with a Bridging Loan?

This varies massively depending on the applicant’s financial circumstances and amount of collateral. The criteria will also differ depending on the lender but a large number of lenders will only lend up to 75% loan-to-value of the applicant’s property. In certain circumstances, if the client has sufficient equity in other properties, then a 100% bridging finance can be provided.

If you are able to take out a first charge loan, because you have no outstanding mortgage on your property, you will usually be able to borrow more than if you are taking out a second charge loan.

Is a Bridging Loan the right option for me?

A bridging loan can be the ideal solution for many people but there are disadvantages to consider too. These are the main pros and cons to be aware of:

Pros and Cons of Bridging Loans

The main Pros of taking out a Bridging Loan include:

  • Fast access to money
  • Able to borrow a large sum of money
  • Protect property chains
  • Enable projects to go-ahead which otherwise wouldn’t
  • Flexible

The main Cons of Bridging Loans are:

  • The interest rates are usually high
  • You will usually pay a large fee for the set-up of the loan
  • By securing the loan against your property, your property is at risk

When you are deciding whether a Bridging Loan is the right option for your circumstances, you should review all of the different options that are available. For example, if you are buying a new property before your existing property sells, you might be able to take out a Buy-to-Let mortgage instead.

However, if you are looking for an option that enables you to have access to money straight away, either to purchase a property, pay tax bills or pay for property renovations, then a bridging loan may be a better option.

Many property investors and property developers use Bridging Loans as a way to get started and then once they have made enough capital, they can stop using Bridging Loans to avoid paying the higher interest rates that typically come with this type of finance solution.

It is a good idea to get financial advice from an expert before you consider taking out any type of financial product. At Commercial Finance Network, as the UK’s leading Bridging Finance Broker, we can provide free expert guidance and advice on Bridging Loans and can help you to find the right type of finance to suit your needs. As a truly independent Bridging Finance Broker, we also have access to all of the UK’s Bridging Finance Lenders, so we can most certainly secure you the best deal and rates available in the market.

If you are interested in any our Bridging Finance services or you want to know how our services could potentially assist in moving your project forward to the next step, speak with one of our Specialist Bridging Brokers today on 03303 112 646 or else request a callback via our Quick Enquiry form below.

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London brokers increasing their amount of international bridging

Based on observations and conversations over the past year, there appears to have been an increase in the search for international funds coming through London brokers.

A growing number of London brokers it seems, are being asked to access money by borrowers keen to do one of three things: either purchase an international property, carry out work on a property based overseas or, increasingly, release money from a property based in continental Europe in order to spend on property or business in the UK. In each of these cases there is another property that is being leveraged on a short-term basis in order to satisfy a development or business need.

There could be a number of reasons for this uplift, but it increasingly seems to be the case that if you have an international property and can’t find funds abroad then you look to London as an international finance centre. For flexible, short-term funding, London is still the place to come, even despite Brexit.

What is interesting is that the people turning to London brokers for help are not even all UK nationals, they are a number of different nationalities all of whom have property on the continent that they need to leverage on a short-term basis.

It makes sense that international brokers like Enness and Knight Frank will be approached for this business as they have international connections so may be contacted in multiple jurisdictions, but the demand seems to be wider than this with a much wider range of brokers being approached. It is not exclusive to London brokers either, but the demand does seem to be predominantly in this region.

The key reason seems to be that short-term finance is not generally available across the continent, but as awareness grows of bridging finance and how useful it is, this is increasing demand. And the key place to realise this demand is in London and the UK.

There has also been an uplift in UK business people releasing capital from properties they may own abroad in order to capitalise on business opportunities here. Many UK business people, especially developers, will have unencumbered property abroad. They are now seeing the opportunity to leverage it for their business or for property development. It is this segment of the market that is showing the greatest potential. This fast turnaround of short-term money can really make a difference to businesses needing to invest, or even needing working capital.

It is an exciting market and what that looks set to increase throughout the year as awareness of the possibilities increase, not only in the UK but across Europe.

Source: Mortgage Introducer

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Bridging market grew by 15% in 2018

Members of the Association of Short-Term Lenders (ASTL) wrote more than £4bn of bridging loans in 2018, representing an increase of 14.8% on 2017.

Figures compiled by the ASTL’s auditors from its bridging lender members for the fourth quarter of last year show an increase in the value of loans completed, outstanding loan books and applications in 2018 from the year before.

Benson Hersch, chief executive of the ASTL, said: “Our latest data survey shows continued growth in the bridging sector, with the value of loans completed in 2018 up by nearly 15% on 2017, the value of applications growing by more than 13% and the value of outstanding loan books also higher than the previous year.

“These results show that, in an uncertain economic environment, our members are continuing to provide useful, flexible finance for a whole range of purposes, and they are doing so whilst maintaining a commitment to high standards of underwriting.

“This is very encouraging and indicates a sustainable sector that is built on robust foundations.”

During this period, the value of applications increased by 13.4% to nearly £21.5bn and total loan books increased by 3.6%.

The value of loans completed for the quarter ending 31 December 2018 increased by 13.5% on the previous quarter and the value of applications increased by 0.3%, although the value of outstanding loan books decreased by 7.1% during this period.

Source: Mortgage Introducer

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Bridging Loans – A source of quick capital

Sometimes, it can be difficult to get a regular loan, especially if you need capital fast. Traditional lenders and financial institutions have a lot of red tape involved in a loan process. Bridging loan cuts away the bottleneck and significantly reduces the time it takes to get much needed financing.

Bridging loan allows you to take advantage of opportunities without having to face the tedious loan application process adopted by most lenders.

In essence, bridging loan provides a way of obtaining short term financing for your project while working towards a more long term alternative. Bridging loans are invaluable especially when you need to purchase a property or equipment that would otherwise not be possible.

Even though bridging loans are commonly used to purchase property, this short term interest only loan can provide a breathing space for you to handle other projects while exploring other sources of funding.

Here are just a few reasons to use bridging loans

Short processing period

Property investors know that delay means losing out. As much as you wish it were possible, a property in the market won’t wait for you to raise the needed funds. There are lots of other investors with access to quick cash who will grab the property from under your nose. With bridging loan, you don’t have to wait for your mortgage to be approved while watching helplessly as a wealthy investor snaps up your dream property. Instead you can immediately raise the money for your new property and worry about selling off the old one later.

Even if you are not in the market for a property, you may need to acquire equipment for your business, or raise capital for raw materials. Bridging loan provides a short term solution for you to raise the needed cash to solve your business needs.

Bad credit financing

A lot of people are in a situation where they find it hard to obtain financing due to a poor credit score. Virtually every major lender will check your credit score before approving you for a loan. Simply missing one payment can plunge your credit score into the pits and even if you manage to result the bad credit issues, the bad record can still come back to haunt you. Thankfully, bridging loan offers a way for people with bad credit score to access the funding they need.

“One of the benefits of bridging loan is that bad credit will not be a barrier. These loans are quick to arrange, can be used for a variety of purposes and involves little or no credit check” says James of Bridging Loans UK.

Bad credit financing is typically used to clear a mortgage or buy a property while a mortgage plan is being worked out, or resolve other financial situations. However, you should have a clear exit strategy in mind before opting for bad credit financing.

Covering tax liabilities

Sometimes, you can be faced with sudden tax liabilities that can be difficult to factor into your current cash flow. In situations like this, you may find it hard to meet your financial obligations before the due date and this can cause unnecessary hardship for you or your business. Whether you are an individual or you run a business, unexpected tax can a hassle.

Bridging loan makes it easy for you to access the necessary funds to meet your tax bill. You receive short term financing to meet your financial obligations so that you can have the peace of mind to focus on other productive aspects of your life.

Debt forgiveness

If you have a property that is due to be repossessed due to inability to meet your financial obligations, a bridging loan can be used to pay off part of the debt and prevent repossession. It can also be used to pay off current lenders so that you will have a bit more time to resolve your situation. If you can stop the property from being repossessed, you retain control and can avoid a forced sale situation.

Bridging loan comes with a variety of repayment plans and manageable interest rates that would not affect the lifestyle of the borrower. It provides a useful source of quick cash that can help you meet any financial obligation in a timely manner. However, you have to be certain you can meet the loan conditions; this means planning your exit strategy, which could include conventional mortgage, buy to let or selling the property outright.

Source: ABC Money

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Bridging lending rises 10.7% in 2017

Bridging loan volumes rose 10.7% to £534.1m in 2017, according to the latest Bridging Trends data from mtf, Brightstar Financial, Enness, Positive Lending and SPF Short Term Finance.

£118.79m of bridging loans were completed by Bridging Trends contributors in the first quarter, before soaring to £150.7m in the second quarter – the highest level of loans transacted by contributors in a single quarter since Bridging Trends launched in 2015.

Volume cooled slightly in the second half of the year, dropping to £142.75m in Q3 and to £122.49m in Q4.

Regulated bridging loans increased market share on previous years to an average of 46% in 2017, compared to 44% in 2016 and 36.6% in 2015. Regulated bridging loan activity outperformed unregulated bridging loans for the first time in the first quarter of 2017.

Average loan-to-value levels dropped to 46.6% in 2017, down from 49% in 2016, while average monthly interest rates remained consistent throughout the year at 0.83%, dropping slightly from 0.85% in 2016 and 0.91% in 2015.

Average loan terms remained consistent in 2017 at 12 months- up from 11 months in 2016. Average completion times averaged 43 days in 2017, down from 45 days in 2016.

Mortgage delays were again the most popular reason for clients taking out a bridging loan in 2017- at 29% of all lending, although this was a reduction from 2016 when they accounted for 34% of activity.

Joshua Elash, director of mtf, commented: “The continued growth in lending volume in this sector, as reflected by the data reported by the contributing parties over the year, evidences the extent to which bridging finance is now increasingly a mainstream financial solution.

“It is interesting to note the what appears to be a direct correlation between the data reported and the macro-economic and regulatory changes which have impacted upon the market. We have, for example, in this annual reporting cycle, seen regulated bridging finance lending outstrip unregulated bridging finance for the first time. This follows on from the implementation of the mortgage credit directive and the consequential introduction of a new class of regulated “consumer” buy to let lending.

“Equally we are interested to note that again for the first time since reporting began, refurbishment to existing investment property was the most popular reason for borrowing during Q2 of last year. This follows on from increases in the stamp duty taxes payable on the acquisition of new buy-to-let properties and indicates a potential strategy shift amongst professional property investors towards value enhancement.

“As we look ahead to the year 2018 we are interested to see how these two trends in particular pan out.  In the interim and what remains certain is that bridging finance as a financial solution continues to go from strength to strength.”

Chris Whitney, Senior Broker at Enness Commercial, said: “Between stamp duty costs and stagnation in the London property market, it’s no wonder bridging finance for refurbishment is becoming increasingly popular. To avoid heft stamp duty charges, many more clients have been buying cheaper or outdated properties, and using second charge bridging finance to update them before refinancing onto a residential product. Likewise, we’ve seen numerous client looks to raise money against their properties who do not want to refinance altogether. As such, they’re using regulated bridges as second charges against their property, in order to keep their attractive first charge mortgage whilst securing the extra funds they need.

“Encouraging to see an overall increase in the total amount of bridging originated by the contributors to Bridging Trends, indicating a strong and resilient bridging sector that can survive what was a tough year with numerous obstacles to overcome, including MCD, PRA and tax changes for BTL/second properties and not least the long-drawn out Brexit negotiations.”

Kit Thompson, Director of Short Term Lending & Development at Brightstar, added: “Our business has seen a large increase in bridging for property refurbishment, with an increase in PDR schemes and change of use projects. In fact, with the exception of our FCA regulated bridging, which by contrast doesn’t generally involve refurbishment, almost all of our non-regulated bridging loans here at Brightstar involved some element of refurbishment, whether just light refurbs or those projects involving change of use and planning consent.”

Source: Financial Reporter

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Pensioners seeking payday loans almost double in two years

The number of people aged over 65 applying for payday loans has almost doubled in just two years, according to new research.

Figures from short-term credit broker CashLady revealed a 95 per cent increase between 2015 and 2017 in the number of pensioners turning to short-term financial help to top up their monthly pension.

The average monthly income of older people applying for these loans went up by £157, from £1,478 to £1,635, in the same period.

Despite a 10 per cent rise in monthly income, the research revealed the loan amount requested had increased by 26 per cent – suggesting pensioner income is struggling to keep pace with the rising cost of living.

In the space of two years, the average amount individuals applied for has increased by £80, from £302 in 2015 to £382 in 2017.

Chris Hackett, managing director of CashLady, said these figures suggest there were more and more older people living off their pensions yet struggling to make ends meet.

He said: “Inflation has been stuck at a high level for the last five years and while pensions have gone up, the shortfall between income and the cost of living is becoming increasingly apparent.

“The challenge for many of these applicants is our lenders will only approve loan applications if the person is in employment, which effectively rules out short-term loan options for those already retired.”

Earlier this month, research from the Pensions Policy Institute (PPI) revealed millions of people were almost completely reliant on a basic state pension of just £7,000 a year to pay their bills and live in retirement.

The report showed that for the poorest pensioners, £3 in every £4 of their income comes from the state pension.

The poorest pensioners are also seeing the lowest rise in income, since pension credit is set to increase by less than the state pension next April.

Paul Gibson, managing director of Granite Financial Planning, said he was surprised with the research results.

He said: “I don’t think most financial advisers clients would typically fall into this category and none of my retired clients have any borrowing requirement.

“Whilst the data may be accurate the annual percentage rate quoted on CashLady website of 1,272 per cent is quite staggering. It seems to be akin to putting petrol on a fire to try and put it out.

“If people are genuinely struggling I would hope there are better ways to cover this short-term debt, but high street banks’ lending criteria has now become so restricted they are not helping the problem as perhaps they should be.”

Source: FT Adviser

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Why small (but growing) is beautiful

2017 was a momentous year for bridging, with annual lending breaking through the £3bn figure for the first time. But before we get carried away, we need to bear in mind this is equivalent to only around one 19th of the residential mortgage market.

By its very nature, bridging is a niche lending market – although it has shown a remarkable ability to adapt and thrive, providing solutions to new market needs in recent years. For property refurbishment in particular, the options now available to developers are far more widespread and competitive.

Who in the mainstream market, would have thought a decade or so ago that bridging would have proved such a socially useful form of lending, enabling empty and neglected property to be brought back into use, and supporting entrepreneurship?

Yet here we are, and I am excited about where the future might lead us.

Gone are the days when the only awareness that people had of bridging finance was in managing the mismatch of timing in the sale and acquisition of two disparate assets.

Now, there is a growing recognition that short-term finance can bridge not just a timing gap, but other gaps as well – the risk appetite gap, for example (especially as far as big banks are concerned following the global financial crisis).

Occasionally, though, I hear rumblings of concern that the bridging market is growing too fast, and risks stoking problems rather than solving them. I also hear concern about the fact that too few intermediaries operate across boundaries – brokering both short term and long term borrowing solutions for their clients.

On the first point, I see little evidence of difficulty. If anything, short-term lenders are more acutely risk aware than their long term counterparts, as the impact will hit them sooner and harder if their customer cannot repay as planned.

As long as sensible due diligence is conducted and the client has a clear exit route, if the demand is there it makes sense to meet it.

As for the second point, I have a degree of sympathy. There are still only a relatively small number of brokers who engage with bridging, with few mainstream brokers considering this as an option – although this number is growing. Holistic advice, and access to the widest possible range of solutions, must always make sense from the client perspective.

One of the benefits of being part of a growing market is the increasing likelihood of forming part of the suite of options on offer. I’m sure it is only a matter of time until more brokers realise it makes sense to look at all options and this in turn will lead to the further growth of the bridging market

As we look ahead, there will be an increasingly fuzzy boundary between products, yet an increasingly clear expectation on the part of clients that their advisers will have all available options at their fingertips. It’s clear that bridging has now earned its place among those options – and that can only be a good thing.

Source: Mortgage Introducer

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A look back at the short term lending market for 2017

2017 was preceded by a long spell of huge growth and this year is no different, but it hasn’t been without a few bumps in the road. The sector suffered a short period where business levels dipped following the referendum, and again after the rate rise, but quickly bounced back on both occasions demonstrating its resilience and ability to adapt.

There have been many new entrants to the market, with a particular focus on the heavy refurb and development markets; this is largely down to the extension of permitted development rights. The rise in refurbishment lending could also be indicative of an increase in desire to improve existing properties rather than move, coupled with the lowest mortgage approval rate on new homes for over a year. Another reason for growth could be that mortgage delays continue to be the leading reason for the use of short term finance.

Overall, there has been a lot of liquidity in the market with fierce competition which has driven rates down even further. The lowest available rate is currently 0.44% pm and the most competitive we’ve ever seen.

Short Term Lending product of the year

This year, Interbay, part of One Savings Bank launched in to the short term lending market. Brightstar were fortunate enough to be selected to trial their product with a headline rate of 0.44% pm. This offers non-regulated clients the ability to benefit from the UK’s most competitive short term lending rates, starting at just 5.28% PA for loans up to 55% LTV.

The product can also be used for property requiring light refurbishment.

The LTV brackets are 0.44% up to 55% LTV, 0.54% up to 65% LTV, and 0.64% up to 75% LTV.

All LTV brackets carry a 2% fee with no exit fee or ERC.

Source: Financial Reporter

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Rise of 115% in numbers applying for a short-term loan to pay their mortgage of rent

THE number of people in the UK turning to short-term loans to cover their rent or mortgage has more than doubled, according to new statistics.

In the past two years the number of people applying for short-term credit who said they needed help paying for their accommodation increased by 115 per cent.

New data from FCA authorised credit broker CashLady found the total number of people applying for loans has also nearly doubled since 2015, with a 93 per cent increase in volume.

As well as the number of loan applications rising, the average loan amount requested by those struggling in the UK has increased by 45 per cent from £224 in 2015 to £325 this year. The statistics from CashLady come just weeks after the Financial Conduct Authority revealed that one in six people in the UK (17 per cent) would struggle to pay their mortgage or rent if it increased by just £50.

Earlier this month, the Bank of England’s Monetary Policy Committee announced it would increase interest rates for the first time in ten years — from 0.25 per cent to 0.5 per cent.

Figures also revealed that NHS workers still top the list of employees who most require emergency financial help.

They are followed by supermarket staff from Tesco, Asda and Sainsbury’s. Struggling members of the armed forces also make up the top five workforces requesting loans.

Managing director of CashLady, Chris Hackett, said being able to keep a roof over your head is “a basic human right.”

He added: “These figures, uncomfortable as they are, lay bare the state of the nation as people are struggling to cover their rent or mortgage payments.

“Wages for some of our most valuable members of society are just not high enough for them to manage basic living costs and they are regularly being forced to seek out short-term financial help.

“Housing expenditure is the largest monthly expense for our customers and they should be able to comfortably afford this before turning to emergency finance.

“We act as a broker for short term credit to help our customers find financial assistance from FCA authorised credit providers instead of seeking out illegal or potentially dangerous alternatives.”

The CashLady figures have been released after Chancellor Philip Hammond was accused of leaving ‘ordinary’ Brits out of yesterday’s budget, by failing to mention a wage boost for public sector workers, despite claiming to “support our key public services.”

Source: The National