Hints and Tips

Remember, these are just handy pointers, you should read through all the information about any given solution carefully and discuss it with us fully before you commit.

Bridging Loans

• Your circumstances dictate that you need a UK Bridging Loan Fast! If you need to complete within a very short timescale such as 48 hours, then remember your own professionals such as your solicitor, need to be available, willing and able to work quickly.
• Loans below £100k may attract premium pricing as bridging companies require a minimum return to make any particular deal worthwhile.
• Remember if your loan plus any rolled up interest reach the lenders maximum loan to value will need to be able to cover the interest payments.

Buy-To-Let Mortgages

• Decide your strategy for building a “Buy To Let” portfolio.
• Buying at auction and refurbishing a property is a strategy many employ to generate serious profits.
• Buying properties or sites with planning potential, obtaining planning and then selling out is another successful strategy.
• Buying a property below market value, purchasing a property via a "one day bridging loan", followed by an immediate remortgage is a popular strategy for no money down deals or even equity release.
• Buying new build properties with a gifted deposit can offer a “no money” down route, however you should ensure that the property was not over priced in the first place. Check for local rental demand and that potential rent will cover your mortgage interest to use this strategy successfully.
• Market research is essential with all property related transactions, talk to local estate agents about what people are looking for in your selected area, make sure you don't talk just to the selling agent! Always remember the old adage - location, location, location.

Factoring

• Factoring and Invoice Discounting solutions are only suitable for business to business trade. Neither is available for Business to Consumer trade however other solutions may be available such as “Payroll Finance”.
• Invoice finance should be lower in cost than an overdraft as cost is based on the number and quality of your customers and not your company’s own credit rating.
• The number of customers you have, the quality of your customers and typical transaction size will be a significant part of the calculation of the cost of invoice finance.

Leasing

• Always check with your accountant that leasing is the best route for your company.
• You should consider depreciating assets as those best leased.
• Assets with low residual values are harder to lease to start up companies.
• If you sell equipment to other companies you should consider offering leasing finance to your customers as a sales, marketing and deal closing tool.

Property Development

• When seeking 100% funding we will always ask for as much detail as possible so that we can consider all the pricing models in the market place. This will allow us to offer you what we consider will be the lowest cost option.
• Warranties – the main suppliers for new build are NHBC, Premier and Zurich. Architects Certificates may also be used but you should check they have sufficient insurance to cover the project. You should note that not all lenders will offer mortgages on properties guaranteed by an Architects Certificate.
• No Experience and high levels of gearing – Typically the higher the level of borrowing the more your relevant experience counts. We can however fund up to 100% of property Purchase & Development Costs for new developers subject to meeting minimum profitability criteria.
• Market Research – Checking the area around your project for comparable properties and values is essential to obtaining funding. Limited comparables may mean funding cannot be obtained or a larger deposit is required.
• Be realistic with your end sale valuations and development costs, being overly optimistic or pessimistic can mean your project may not get funded. You should cost and price at a level an independent valuer or Quantity Surveyor will agree with.
• Avoid spending on enhancements that don't add value to the property.
• Tight managing and scheduling of trades & suppliers is essential to avoid costly delays.
• Have a back up exit strategy, if sales are slow, will your properties have sufficient rental potential to allow for a “Buy To Let” mortgage of sufficient size to take out your current lender.
• If you have an offer to buy multiple properties by a single source, do not allow too much time to exchange contracts as weeks can become months, costing you money when you could have sold elsewhere.

Trade Finance (Letters of Credit & Forfaiting)

• Always check you are opening the right kind of letter for your transaction; if it is not transferable then you will not be able to “discount” it for instance.
• Before opening an international trade finance instrument of any kind you should always satisfy yourself of the suppliers ability to perform as you will lose any fees you have paid should they fail to deliver.
• Trade instruments such as Letters of Credit cannot be discounted by a forfaiting facility from all countries. However the list of acceptable countries of origin change regularly, so please contact us for the latest view.