December 2015 - First 4 Commercial

Bridging Loans And The Increase In Housing In Britain.

After the housing budget was allocated by the Chancellor in the autumn statement, the amount of affordable homes available for the UK population has been targeted to significantly increase. The growth of the bridging market has reflected this rise too, it is a financial solution that is without doubt helping to get more homes in Britain built. Despite more government funding being available for housing developments, it won’t solve the demand for more housing overnight, therefore niche lending helps to fill this gap.

Smaller developers tend to rely more on bridging finance as they may not necessarily have a large portfolio which they can leverage. Duncan Kreeger, director of West One Loans, stated that: “The housebuilding measures announced in the Autumn Statement will hopefully go some way towards making up the shortfall between the supply of homes in this country and the demand as the rate of construction in this country hasn’t kept pace with a rapidly rising population for some time now.” Hence bridging finance will help the housing market and the developers to meet the new government targets.

It is a respected form of funding for developers and business alike, allowing flexibility and financial flow. As a source of lending it literally bridges the gap between purchasing either a building to renovate or land, pre-construction. Bridging finance also allows a property to be bought at auction as the financial solution is determined prior to this. It can also help you to secure finance on more than one property at a time. So whether you are a developer renovating a building, or embarking on a new build, this form of finance provides simplicity and fluidity.


Buy To Let Mortgages And The Rental Market.

Your Move and Reeds and Rains have recently published that rents in England and Wales have just fallen below the £800 per calendar month mark. With the average rent sitting at £799 or less it shows a gradual fall from September’s £816 average. However the last 12 months show a rent rise of 4.0% from the previous year and although the winter months have shown a decrease, with spring just around the corner, this is likely to increase again. With one in five people in Britain renting this will have a big effect on the pockets of all tenants.

The director of estate agents Reeds Rains and Your Move, Adrian Gill stated that “Rents are cooling – and this presents a winter window of opportunity. As Christmas approaches, savvy tenants looking to move are taking the chance to negotiate a better deal in the off-peak lettings market”.

However rental income and the capital growth of a property have shown a decent yield despite lower rents being obtained from a property. “The average landlord in England and Wales has seen total returns of 10.9% over the twelve months ending November 2015 – up from 10.4% in October 2015.” Where returns have been lower on savings and stocks, property has been a very real investment attraction. Finding the right property in the right area is without doubt key to the buy-to-let industry. In many parts of the country landlords have seen a demand in tenants due to many people finding it increasingly difficult to save for a deposit on a house of their own.


Niche Borrowing For Alternative Finance.

The financial services sector offer a plethora of different products which provide alternative fiscal solutions to borrowers in a unique or niche position. Bridging loans, buy to let mortgages and short term loans are all available as beneficial service offerings.
However there are other products that are incorporated into this niche borrowing alternative such as the financing of multifarious portfolios and development finance. This lends itself to finding a broker with not only greater experience but more in depth knowledge within these specialist areas.
For example bridging loans and short term property finance have supported the housing market in many ways. Short term lending has been used to refurbish what have previously been un-mortgageable or un-inhabitable properties. It has also helped developers to secure plots for construction projects that would have been more difficult to do without this from of lending available.
As with all finance, the requirements of the borrower need to be aligned with those of the lender, however suitability and qualification often require a more in depth and alternative approach to high street lending. Therefore it is essential to find a dedicated and professional team that will deliver the best monetary solution for your needs. Transparency, expertise and a more ‘hands on’ approach is provided by the lenders in these cases. This is normally because each case varies, the circumstances of every customer will differ, so the approach to finding the correct finance will reflect this.


When is a business sustainable? – How to cope with growth.

When a business grows and matures into something workable it can only be a good thing, not only for the owners but for its employees too. When a business develops rapidly, this can cause its own set of problems. Financing quick growth is not always easy, especially if you don’t have a decent or long enough track record with your bank. A business should be able to finance its own growth to make it sustainable however this is not always the case. This is when various types of commercial financing come into play.

What is sustainable growth rate?

Quite simply it is the maximum amount a business’s can grow without having to leverage any finance or debt financing. For example the sustainable growth rate is the maximum amount of sales orders that a company can achieve and manage. Whereas break-even is the least amount of sales it can do to stay afloat. Having the right infrastructure that can grow with your business model is all part of this concept. No one wants to turn down sales, so what is the solution?

• You could sell an equity share in your company to raise finance however this will dilute the shareholding of the owner.
• Or consider invoice financing.
Why consider a loan?
• It will help you to keep control of ownership so your success is yours and no one else’s.
• It will improve your cash flow and a repayment schedule can be designed to fit around your business strategy and needs.


Why is public liability insurance so important for a business?

If your business comes into regular contact with customers and the general public, then liability insurance is a must have for many reasons; not least of all that it will protect you against any claims made against you, therefore ensuring the longevity of your company. So what does this type of insurance cover you against?
1. At some point in the future as a business owner you may be faced with a liability issue. If a customer sued you for a loss, injury or damage to their property then a good public liability insurance will cover what could otherwise be devastating and crippling costs. Without such an insurance your business could potentially fold.
2. It covers a whole host of expenses, such as legal fees and damages. Legal fees can be expensive and a case can take a long time to come to fruition and be settled. Therefore having this type of back up could stop your business from folding.
3. It can also protect your employees too. If a colleague was negligent during the course of his/her work then your business would still be protected.
4. Accidents do happen and no one has a crystal ball that can tell how and when, so whether your business has a low risk or not, it’s a cover worth having, purely for peace of mind. A floor that has not been mopped up properly, or something falling from a shelf can have catastrophic knock on effects, not only to the person who was injured but to the business and its reputation.

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