Lumi Bridging Solutions?
What is a Bridge?
A Bridging Loan or Bridge is a short-term or temporary form of specialised finance that is secured against a property or other assets.
Bridging Finance explained.
A Bridge or Bridging finance is widely used by property investors, developers and business owners and can be used for an array of short-term finance needs. This type of finance is secured against property or other assets and known simply as a “Bridge” that fills a financial gap over a short period. Upon agreement with lenders, these loans are available when temporary funds are required and traditional lenders will not finance due to the short loan term or the type of asset being offered as security.
In these instances, Bridging Finance specialists like Lumi Bridging Solutions can help to obtain the right funding to complete the transaction or project quickly and effectively.
Typically, an application for bridging finance can be made faster than conventional finance as the lending criteria is different, so subject to acceptable security a facility can be arranged quickly. In most instances almost any type of commercial or residential property can be used as security, subject to lenders underwriting and valuation.
This is therefore ideal for development projects or property renovation – bridging loans can be secured against land; with or without planning permission, but the stronger the proposal the greater likelihood of a successful application.
A Bridging Loan is asset based and therefore has a different lending criteria to that of a typical bank loan or mortgage, so can be arranged faster to provide an effective form of flexible short-term funding.
These loans are highly flexible and the term of a Bridging Loan can be a matter of weeks up to 18 months, in some cases this period may be extended depending on the circumstances or purpose of the loan.
Where interest payments are made monthly this is classed as “serviced interest” whereas when interest is only paid at the end of the loan term, upon the redemption of the facility this is known as “rolled-up interest” which maximises monthly cashflow..
The interest element of a rolled-up facility is deducted from the gross loan amount of a Bridging Loan.
Although Bridging Loans come with higher costs when compared to traditional loans, they offer greater flexibility but are asset based which is why a clear exit strategy is critical. An effective exit usually takes the form of refinancing by way of long-term commercial finance, mortgage or the sale of the asset or completed project being sold on the open market – a good strategy and strong exit is essential on a bridging loan as this will generally offer a better rate of interest at the time of application.
It is therefore vital to have a healthy understanding when addressing the intricacies and mechanics found within such facilities to ensure the most cost-effective option is utilised, as there are an array of bridging formats and lenders to choose from.
Lumi Bridging Solutions specialise in this space, so can fast-track bridging loans and finance applications, linking them to the most appropriate options available on the market at the time of application.
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Generally speaking, applicants could be private or business individuals, this may include, but not limited to, property developers, investors, property renovation companies, landlords, entrepreneurs, business owner/operators or companies in need of additional funds or cashflow.
Bridging Loans have a wide range of uses and applications, typical examples include:
Auction property purchase: Property purchased at auction will usually need to complete within 28 days or less, so a Bridging Loan is the perfect solution to raise funds quickly and effectively.
Property renovation, refurbishment or conversion: In this scenario Bridging is ideal, to provide additional short-term funding to facilitate building works, in addition to the property purchase.
Restoration of Development Finance facilities: Usually used to increase the time-frame and enable the completion of works to ready a property for sale on the open market.
Business related bill payments: If urgent funds are required and secured against a property, then a Bridging Loan can be used to help pay business related bills.
Refinancing – existing Bridging Loan: Generally when an existing lender will not extend the original loan agreement, and the borrower needs to obtain a new Bridging Loan from another lender.
Extensions to a lease: When a lease agreement is due to expire, a bridging loan as a solution could offer a time based extension.
Distressed sale property purchase: Bridging finance lenders are available to offer loan advancements based on the value of a property, irrespective of the purchase price.
Non-mortgageable or uninhabitable property purchase: There are numerous reasons why a property is deemed as such. This could be fire or flood damage, or simply that the property has no kitchen or bathroom, consequently, deemed “not to be mortgageable” because it is un-inhabitable.
- When applicable the borrower will be responsible for legal fees and valuations.
- Loans are available with first and second charge, with certain lenders reliant on lending with an Equitable Charge.
- The provision of bridging Loans is for but not limited to UK citizens, Foreign Nationals, Expatriates, UK companies, UK Trusts, Offshore Trusts and Companies, Executors, Sole Traders, Partnerships and Limited Liability Partnerships etc.
- Lending is relative to certain property types that include: Rural Properties, HMOs, Grade 2 listed, Mixed Use, Commercial Property, Buy to Lets, Residential Investment property, Ex-Local Authority property, Semi-Commercial, Land with Planning and Property Portfolios.
- Up to 75% ‘Loan to Values’ (LTV) Loans available, with additional security could reach 100%.
- Depending on the ‘Loan to Values’ (LTV) required, interest rates could start from 0.4% per month.
- Loans sizes available from £25,000 upwards!
- In certain cases there may be no redemption or exit fees.
- Lumi Bridging Solutions provide services to United Kingdom based applications.
- Bridging Loans may be available for bad or adverse credit status
- Loan terms usually from 3 to 18 months.
- No upper age limit for those wishing to borrow.
In no particular order: Lenders require the location of the property by providing the full address, including postcode or property name (if applicable).
If applicable, details of planning permission for the property.
Details of borrowers must be given to lenders. For example: Is there a limited company, an individual or other that is looking to apply for finance. In all circumstances, they need the full names of all applicants, each providing their Date of Birth with a full history of residential addresses for the past 3 years. Should the application be made by a company, then the company name and number with a full listing of all Directors details and all significant shareholders where share ownership is greater than 20%?
Valuation or the sales particulars if you are in possession of documentation (Don’t instruct your own valuation)
A detailed explanation of your intentions and plans for the property is required.
What will be the Bridging Loan repayment method (As discussed in the afore-mentioned exit strategy, usually via sale or refinance).
When sourcing a Bridging Loan, there are numerous fees that should be taken into account. They include:
- Arrangement or administrative fees – A charged made by the lender for the loan provision.
Lumi as a brokerage have no up-front brokerage fees, however we charge a fee for our services in arranging a loan or any finance facility.
- Exit or completion of loan repayment fee – Usually charged on completion of loan its repayment.
- Surveyors or Valuation Fees – A Royal Institution of Chartered Surveyors valuation (RICs) is usually required.
- Legal Fees – Solicitors fees.
- Interest – Usually calculated daily, but can be on a monthly basis.
Lumi Bridging Solutions can usually provide a preliminary offer within 48 hours. In some cases, this can be obtained within a few hours, dependant on the time of day the application is made to the lender.
The timescale for completing a bridging loan is dependent on a number of different factors including but not limited to, obtaining all necessary documents from our clients, the case being underwritten by the lender’s underwriters, and subject to the relevant approvals from the lender’s Solicitors and their nominated valuers.
We aim to complete all applications as fast as possible.
Bridging Finance can be used for almost any legitimate reason as long as it is secured against an appropriate asset.
Funds can be raised quickly to purchase a property at auction or perhaps pay a tax bill.
Traditionally, Bridging Finance can be used to renovate an investment property, or purchase a property which is classed as not being mortgageable or inhabitable in its current state and you intend to bring it into a good order of repair through refurbishment.
Lumi Bridging Solutions uses years of experience and current technology, to source the most appropriate lender based on all the information provided by the borrower. Saving time, money and maximising ‘Loan to Value’ bridging Finance.
- Borrower’s details must include full names or company name and number with full address.
- The full address of the property, which will have the loan secured to.
- What was source for the deposit?
- The length of term required for the loan.
- The all-important “exit strategy”, or method that will be used to repay the loan.
- A detailed report of any experience the borrowers may have, when that experience is applied to the proposed plan or intentions for the property.
- Has there been any bad or adverse credit history?
Commercial Bridging Finance
Looking to buy a commercial property or need funds for another business purpose?
Buy to Let Bridging
Buying at auction or a property for refurbishment?
A bridge can give you funds fast to complete that quick purchase.
Bridging Finance to break that chain
Need a bridge until you can sell your current home, or simply release funds for another project.
Borrow from £25,000 to £50m
No matter how much you want to borrow, we will do our best to make it happen, without the fuss or headache.
Rates from as little as 0.4% per month
Lender’s rates change regularly, so we always scan the market to get the best rate for your specific circumstances.
Make use of our in-house accountants
Their expertise and experience are part of our service and at your disposal.
Helping you choose the right bridging finance for your commercial or residential moves
Find the right bridging finance at Lumi Bridging Solutions
Contact us today for your bridging finance, buy to let mortgage, commercial mortgage, bridging loan for house purchase, HMO purchase, emergency cashflow loans, auction finance, bridging loans for property development, bridging loan mortgage, business bridging loan, commercial development financing.
Bridging finance for your commercial or residential property
LUMI BRIDGING SOLUTIONS IS A TRADING NAME OF FEINGOLD FINANCIAL SERVICES LIMITED
Company registration number 05087823. FCA registration number 303451. Data protection registration number Z8766562
Registered office: 1st Floor, Swan Buildings, 20 Swan Street, Manchester, M4 5JW.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE SECURED AGAINST IT.