February 2015 - First 4 Commercial

Non-status lending for 1st, 2nd, 3rd or 4th charges

Non-status lending: Another addition to our compliment of lenders. If you need money for business cash flow or working capital we have a lender who is able to help regardless of your current credit situation. Our new Non-status lending option is able to offer finance even with impaired credit situations or no proof of income.

Offering loans to Limited Companies (including newly set up day one companies). We can facilitate a loan for you on a first, second, third or even fourth charge basis. With loans on residential properties up to 70% and 50% on commercial properties, we can provide your business with the funds you require.

All adverse credit histories are considered, with minimum terms from 3 months to 10 years and everything in between. Rates start at 1.16% with a 1% exit penalty (based on the loan advance). This is a very competitive non-status product into the current market.

Drive-by valuations are also common for this new lender when possible and a flat £499 + VAT legal and valuation fee on offer assures our clients of no surprises.

Get in touch today to see how we can help your business.



T: 01277 620083 F: 01277 658900 E: info@first4commercial.com

A: 5 Alyssum Walk, Billericay Essex CM12 0SS


New Buy to Let lender added to panel

We are able to strengthen our lender panel even further today with the addition of a new Buy to Let lender who specialise in Limited Company Buy to Lets and also Houses in Multiple Occupation (HMO’s).

A competitive product range, including fixed and tracker rates as well as lending up to 80% LTV. This is a very strong addition to our already extensive lending panel.

Highlights of their criteria include:

  • Purchase or re-mortgage
  • Limited Companies
  • Individuals
  • HMO properties
  • Student lets
  • Portfolio landlords
  • Up to 80% LTV on standard BTL’s, 75% on HMO’s – fees can be added to the loan.
  • Rental income is assessed at 125% of the initial rate, nominal rate (5%) or revert rate whichever is higher
  • Min income £25k

Feel free to contact the team for further information on your new Buy to Let mortgage enquiry.



T: 01277 620083 F: 01277 658900 E: info@first4commercial.com

A: 5 Alyssum Walk, Billericay Essex CM12 0SS


Breaking the Property Chain

Buying property should be straightforward, but when there is high demand, then the chips are down for buyers and sellers. And buyers in particular can find themselves in hot water when another buyer steps in to outbid them and a property chain breaks down due to gazumping. If you do find yourself in the unfortunate position of being gazumped, then not only will you have lost a home you’ve set your heart on, but you’ll also be liable for legal costs and survey fees.

To avoid this happening, then buyers should always be prepared. If you’re trying to buy in an overheated market such as Brighton, which has recently been declared ‘gazumping capital of the UK’ then bridging finance can be used to complete on a new property before the existing one is sold. This could allow you to pay the asking price rather than place an under-bid, which increases the risk of being gazumped. Other advice to avoid the horror of gazumping includes having the mortgage application ready to speed up the sales process, and making sure the house you intend to buy is removed from the market for an agreed period. This is normally 4 – 6 weeks.

As long as you have enough equity in a property and a clear exit strategy then a bridging loan can help you quickly secure the home or commercial property you need. Just contact us on 01277 620083 for a no-obligation chat about your options.


The Danger of Wasting Time

One of the greatest benefits of bridging loans is the speed with which they can be arranged. Bridging finance is most useful for properties purchased at auction requiring finance within 28 days, or for quickly securing a buy to let property for a good price.

However, we sometimes find that customers come to us in a panic after trying to secure finance elsewhere first. Optimism is a good thing in life, but trying to secure a mortgage for a property bought at auction or to secure a development property ineligible for a conventional loan means that investors are often left high and dry. More importantly, staking all your hopes on a buy-to-let mortgage can leave you seriously out of pocket. If you’ve got to the stage where you have invested in valuation fees, legal costs and surveyors fees, or even gone so far as to exchange contracts for a property that doesn’t have a kitchen and bathroom, then you’ll have wasted thousands to find out that the deal can’t even go through.

As a result, we recommend considering bridging finance from day one. Rates are low in comparison to historic bridging finance interest costs, and you won’t be risking losing out on a property or breaking a buying chain. You could also be saving yourself thousands of pounds in wasted costs. So don’t let a lack of finance hold you back; seek advice from us before you go any further.


Solving the UK Homes Shortage with Bridging Finance

With the cost of buying a property ever rising, then the government’s Help to Buy scheme launched in April 2013, attempted to address the problem. Consisting of two different schemes, a Help to Buy equity loan allows home buyers to borrow up to 20% of the cost of a home up to £600,000, meaning that a 5% cash deposit and a 75% mortgage makes up the rest.

The mortgage guarantee scheme works in exactly the same way as any other mortgage except that lenders are guaranteed 15% of the loan value should the mortgage holder default. Lenders can sign up to the Help to Buy scheme and pay a fee to the government for a seven-year taxpayer guarantee.

However, although in theory the Equity Loan scheme is a good idea; it comes with a big catch. It can only be used for new builds. With such huge demand for homes of all types, then encouraging new builds is a good thing. Yet we should also be making far more of existing properties which are in need of renovation.

Property developers need finance to transform unloved buildings into suitable domestic dwellings to fulfil demand, and these government schemes don’t address that. As a result, bridging finance applications are rising to meet demand for development finance. Unlike mainstream finance, a bridging loan allows developers to invest in dilapidated properties. Which is exactly what’s needed to solve the housing crisis and allow potential landlords to provide homes at a profit.

As a result, bridging finance remains the ideal way to finance development properties. For more information about how bridging finance can help you, then call us on 01277 620083.


Bridging Misconceptions

Reluctance to apply for a bridging loan is often as a result of the commonly held view that bridging finance is risky finance. Yet bridging loans are not only highly flexible compared to mortgage lending, but are also regulated by law and are subject to strict exit guidelines. Bridging lenders always carefully assess the purpose of a loan, and are very unlikely to lend if they don’t see a clear way of repaying the debt. After all, it’s in everyone’s interest for the loan to be repaid! If used correctly, bridging finance can be an extremely effective source of capital. So clearing up the misconceptions should allow you to decide whether a bridge loan is a good solution for your personal circumstances.

The perception of risk is normally as a result of property deals falling through. However, bridging lenders are also willing to practice forbearance, and extend loans to allow time for a property resale or refinancing. Moreover, all bridging loans are individually underwritten, meaning that lenders are very keen on ensuring the purpose of the loan is viable for the borrower. The borrower’s long term strategy is always carefully considered. Ensuring that borrowers plans are as robust as possible is essential.

The main point to bear in mind is that bridging loans do exactly what they say on the tin. They should not be considered as a long term finance option, but rather as a ‘bridge’ to capital. Keep this in mind and you’re unlikely to go wrong.


Looking for a Personal Loan? Consider P2P

Peer-to-peer (P2P) lending is being described as the ‘next gold rush’ amongst those in the know, and brokers offering P2P financing for personal loans are beginning to report massive uptakes in this revolutionary approach to lending due to the numerous benefits. Brokers with connections to P2P lenders can take the hassle out of securing a personal loan, essentially removing the middle man (the bank), speeding up the process from start to finish and reducing interest rates. P2P is becoming such a popular choice that it’s being reported that major banks are advising customer who have been refused a loan to seek out a reputable P2P lender.

Peer-to-peer lending is a part of the growing trend for moving away from traditional banking methods that can be associated with lengthy processes, strict criteria, and high interest rates, and transforming finance into a much more laid back, informal industry that’s simple and stress free for both lenders and borrowers. P2P has already gained a great deal of popularity within the commercial sector, showing particular success with companies such as Kickstarter, for example, and it is expected that this success can easily be replicated within the personal loans sector.

The market for peer-to-peer lending in the UK is estimated to total around £1.7bn, with that being divided roughly equally between the commercial and personal lending sectors. Experts in London’s financial technology community strongly believe that P2P lending is the next big thing in terms of personal borrowing, with 26 percent fully expecting the industry to be the fastest growing financial sector over the coming years, rivalling the increasing growth of mobile payments.


Non-Status Commercial Financing is Back in Business

Back in 2007, around the start of the UK’s housing market crash, major lenders began to cut back on lending to borrowers deemed to be higher risk – particularly to companies who were unable to provide detailed accounts records. Some lenders even removed their high risk financial products completely, and it was reported that an estimated 75,000 credit applications were rejected during this period, leaving it practically impossible for individuals with poor credit history, or for companies lacking adequate accounts records, to secure necessary financing.

Turning to High Interest Lenders

Many individuals and companies found themselves turning to high interest payday lenders, and although this type of short term borrowing has proven to be very popular, it is beginning to be phased out for fears that the economy could be greatly affected should businesses find themselves unable to afford the high interest repayments. In 2014, payday lenders were issued with limitations, both on the amount than can be issued, and on the interest that can be charged, maxing out at 0.8 percent. Furthermore, the UK Government is urging major high street lenders to offer products aimed at high risk borrowers in an effort to draw them away from risky financing options.

Creating New Financial Products

Many voiced concerns that payday customers would instead switch to illegal money lenders, but as more and more mainstream lenders are creating financial products to meet the needs of high risk borrowers through non-status financing, it is hoped that businesses, especially start-ups who are unable to provide accounts, will be approved for financial assistance through major lenders. It is anticipated that non-status commercial financing will make a welcome comeback during 2015.


There’s Never Been a Better Time to Buy-to-Let

When the buy-to-let industry really took off in the early 2000s, the concept was largely seen as a fad – a quick, yet temporary way to make a profit. However, as of 2015, the buy-to-let market is showing no signs of slowing down, and research even suggests that the industry could grow at an even faster rate over the coming years, with the current statistic of one in five homes being owned by a private landlord rising to one in three homes by the year 2032.

A Buoyant Market

So why is 2015 a good time to enter the buy-to-let field, and why is the market looking to expand by almost unprecedented rates in the coming years? Despite first-time buyer lending increasing, the economy is also continuing to recover from the recession, and house prices are rising sharply, with an average 8.5 percent increase during 2014. This is leaving many first time buyers unable to get onto the housing ladder and searching for alternative ways to secure suitable accommodation. Essentially, it’s an investors market out there.

According to the Council of Mortgage Lenders (CML), buy-to-let mortgage lending has risen by nearly 20 percent in the past year alone as more and more investors are starting to understand the advantages to private letting, including average gross yields of around 11 percent. However, experts acknowledge that, in order to see the best returns, timing is crucial. The good news for investors is that the time is now. With the market looking to expand dramatically over the next few years, there has never been a better time to jump on the buy-to-let bandwagon.


Why Common Views of Bridging Loans are Outdated

Bridging finance is often met with a degree of negativity, especially from media sources who claim that, by bridging the gap, homeowners are leaving themselves vulnerable to significant loss. When bridging finance was first introduced, this may well have been the case, but significant changes in the economy, and in demand, mean that these traditional views of bridging loans are now very outdated, and, in fact, bridging the gap could be a sensible option for many looking for financial assistance assuming they have a solid exit route in place.

So why has bridging finance transformed from what some believed to be a risky endeavour to something that’s now completely normal, even mundane?

There are many reasons, but two of the most popular are, of course, related to the ongoing effects of the recession. With many homes still valued at less than they were before the crash, and with exchange rates making foreign properties all the more attractive, buy-to-let investors are seeking new ways to fund their projects, and sun-seekers can purchase properties abroad quickly and easily, arranging mortgages and sales afterwards at their own pace. Reports suggest that bridging loan lending for foreign properties has risen by 22 percent in recent years, helping to make bridging finance a much more mainstream option for buyers and sellers.

Media sources are reporting that bridging loan interest begins at 0.75 percent, while others go even further and state that rates are frequently between 1.2 and 1.25 percent, striking fear into those looking into this type of financing option. In reality, figures are not that high, with rates as little as 0.65 percent per month from select lenders. Bridging finance is now an everyday part of the lending sector, hitting a milestone £1bn in 2013 and continuing to grow.

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