A bridging loan is a short term loan (usually 3 - 24 months) which is secured against property.
What is a bridging loan?
Bridging loans are typically quicker to arrange than those from high street banks, so they are often used for buying at speed (such at auction). They ‘bridge the gap’, whilst longer term funding is being arranged or property is being sold. Other common uses for Funding 365’s bridging loans are refurbishing property, refinancing property development loans (often called ‘development exit’), enabling landlords to consolidate the funding across their property portfolio, and releasing working capital for businesses from their property portfolios. Bridging lenders are often able to be more flexible than high street lenders, so they can often assist those who are less experienced or have adverse credit. Bridging lenders can also provide funding against properties which may not initially be of a suitable standard (e.g. habitable) to qualify for a high street loan.
What are bridging loans used for?
A development loan is a short term loan used by property professionals to either build new property, or to make extensive changes to existing property (such as PDR schemes, property conversion or development finish and exit). Our light development product is for the latter. The main different in practice between a development loan and a bridging loan is that with a development loan the works are funded in tranches in arrears as the build progresses, rather than the entire loan provided fully up front as you would get with a bridging loan.
What is a development loan?
Put simply, unregulated loans are for business purposes and are secured against investment properties rather than a borrower’s main residence. For example, a landlord buying a buy-to-let property, a developer funding their build, or a business raising working capital.
What is an ‘unregulated’ loan?
A first legal charge is a principal loan on a property. The first charge lender takes precedence above any other lenders (such a second charge lender or mezzanine lender).
What is a ‘first charge’ loan?
We currently lend against most residential, semi-commercial and commercial properties in England and Wales. There are a few property types that we do not currently lend against, such as operating hotels, restaurants, bed and breakfasts, nightclubs, petrol stations, churches, farms and pubs (unless leased and operated by a nationally recognised company).
What kinds of properties do Funding 365 lend against?
All applicants are looked at on a case-by-case basis. The key borrowers to whom we lend are: •UK citizens aged 18 - 85 years; •Foreign nationals who reside in the UK and in some cases, those who reside abroad; •UK limited companies; •Pension funds such as SIPP and SSAS (commercial property only). Some exemptions apply. For more guidance, speak directly to an underwriter on 0800 689 0560 or firstname.lastname@example.org
Who do Funding 365 lend to?
We only charge an arrangement fee (typically 2%), plus valuation and legal fees at market rate. We do NOT charge any admin fees, exit fees or early redemption charges as standard on our bridging or light development loans.
What fees will I need to pay for a Funding 365 loan?
We can offer loans with serviced or retained interest. Serviced interest is paid monthly and retained interest is paid upon redemption. We can also work out a combination of the two to suit the borrower.
What types of interest do Funding 365 offer?
We only instruct RICS registered valuers from one of the surveying firms on our extensive valuation panel. We always require the surveyor to inspect the subject property. We can consider valuation retypes originally instructed by other lenders on a case-by-case basis.
What types of valuations do Funding 365 instruct?
Bridging loans typically take between two to four weeks to complete, but can be completed in just a few days depending on the complexity of the loan and how quickly the borrower requires the funds. At Funding 365 we control our funding in-house and our decision-makers are involved from the start, so there are no delays from our end.
How quickly could I receive the funds?
The underwriter who managed the loan completion will personally remain in contact with the borrower throughout the term of the loan. They will be able to provide a final redemption statement and answer any additional questions about how to repay the loan.
How do I repay my loan?
Yes, borrowers may pay back a Funding 365 at any time. All of our loans are subject to a 3 month minimum interest period, but after that we will rebate interest on a daily basis and we do not charge any early redemption charges on any bridging or development loans.
Can I exit a Funding 365 loan early?
We always require robust exit plans from our borrower before we deliver any funds, in order to try to avoid this. However, we appreciate that upon occasion, issues can occur. In the first instance we will always to try to work with our borrowers in order to find a mutually acceptable way forward. The more notice we can have, the better.
What happens if I cannot repay on time?
Unlike other short term lenders, our set up is not focused around a sales team but rather our decision-making underwriters. They manage each case from initial enquiry to completion (and beyond) for an outstanding, seamless and certain experience for our clients. This approach has earned us a number of industry awards, including most recently the Business Moneyfacts 2022 ‘Best Service from a Bridging Finance Provider’. We also have a 100% 5 star Google rating from our borrowers (link).
How is Funding 365 different?
If you have any other questions or for more information on the above, speak directly to one of Funding 365’s decision-making underwriters on 0800 69 650 or email@example.com