Saturday 24 October 2009

Do Non Status Bridging Loans Still Exist?

Non status bridging loans have always been written in the UK regardless of previous credit history. The main criteria has always been the loan to value required meeting bridging lenders current criteria. Is this still the case today?

Bridging finance is typically aligned at or just below the prevailing long term mortgage market because that is one of the main repayment options. With mortgages much more difficult to access, bridging lenders this year have been much more focused on repayment. If the lender believes your credit profile isn't good enough to arrange a mortgage then a bridging application is unlikely to succeed.

Where loan to values are low with plenty of equity in the property offered as security then a bridging loan is still pretty easy to arrange. However, if the bridging loan requirement is anywhere near a lenders maximimum, then the focus will turn to the borrowers ability to pay interest on a monthly basis should things go wrong and the loan period needs to be extended.

Our conclusion is that truly non status bridging loans have pretty much disappeared and things will remain that way until mortgage lending criteria are eased.

Thursday 6 August 2009

Is the housing market improving?

There are without doubt more mortgage products available in the residential housing market today. This may have contributed to the small increase in house prices over the last 3 months as reported by the Halifax & Nationwide.

As bridging lenders products tend to follow the mortgage market any changes from their perspective can be a forward indicator. We note the following news from the bridging loan market:-

  1. A recent broker survey noted an upward trend for bridging loans.
  2. One of our funders has expressed an interest in financing small, niche property development projects.
  3. Another lender has recently raised £75m of capital for new lending.
  4. Finally, one lender has reported a 100% increase in actual lending over recent months.

There is obviously a long way to go before the inevitable recovery, but maybe we have reached a turning point.

Thursday 2 July 2009

The Commercial Property Market

It doesn't matter whether your interest is in the residential or commercial property market place, it would be highly unusual if London and the South East didn't lead the way in any recovery!

News of a bounce in London's commercial property sales maybe a sign that things have at least stabilised. Property agents Cushman and Wakefield report a 110% increase in London commercial property sales in the 2nd quarter of 2009, driven by bargain hunting overseas investors, distressed sales and the value of sterling.

Although sales are still lower than a year earlier, this can only be good news! Stable or slightly increasing prices may just mean it will become easier for UK borrowers to obtain a commercial mortgage sooner rather than later.

Wednesday 20 May 2009

Commercial Finance Brokers

We have recently been reading about customers looking for business finance who have tried to raise loans via brokers and been charged thousands of pounds in up front fees only to be told the deal cannot be done.

As reputable UK based Commercial Finance Brokers Eland Business Services Limited do not charge any upfront fees. We would recommend that anyone seeking business finance should not proceed with any commercial loan broker who does!

Note that for some deals, for example property related, up-front fees for valuations and legals will be required by lenders. Any such fees should be paid direct to the lender and not the broker!

Tuesday 27 January 2009

Key Facts About Equipment Leasing - UK

Here is our 60 second key facts guide to UK equipment leasing.

  • Unlike other forms of commercial finance applying for equipment leasing finance is a very simple process. All that's needed is a short one page leasing proposal form and the equipment quote(s) for the initial application. Supporting information to complete the application should already be available such as bank statements and accounts etc.
  • Timescales from application to loan completion are fast, typically around 2 weeks!
  • The lower cash outlay normally needed for an equipment finance facility means that you can buy more or higher specification equipment in comparison to outright purchase!
  • Monthly payments (rentals) are fixed for the term of the lease which means all future costs are known.
  • By leasing cash can be retained within the business thereby preserving working capital for use elsewhere within the company.
  • Where sufficient cash is not available to purchase equipment, leasing gives access to plant & machinery that otherwise might not be available.
  • UK rules mean that 100% of monthly rentals can be offset against tax, this can make leasing cheaper than outright purchase or other commercial loans.
  • Where the latest technology is a must to remain competitive, leasing provides a sustainable upgrade path at agreed intervals.
  • Finally, equipment already owned can be used to raise working capital via leasing sale and leaseback finance facilities.

Tuesday 20 January 2009

The Banking Crisis

Yesterdays collapse of the share price of Royal Bank Of Scotland can only delay any recovery in interbank lending which is at the heart of the "credit crunch". It could now be argued that RBS has "cleared the decks" and declared all it's loan problems, but what about the other banks? If suspicions remain then no credit easing will take place further delaying any recovery in the commercial loan and personal finance sector!