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Scottish property Development Finance
Feb
23

Scottish Property Development Finance Continues Unhampered

Brexit is the big word and will continue to be for the foreseeable future in terms of property investment. It doesn’t seem to matter what is being explored and discussed, when the Brexit word enters the conversation, eyebrows are raised.

It could be anything from Scottish property development finance to bridging loans in Scotland, because Scotland is part of the UK, the Brexit uncertainty cannot be avoided.

Despite enjoying a different legal system and buoyant property market, Scottish investors still watch quietly as the Brexit negotiations play out. Those who are in the know, however, have indicated that Scotland will weather the property development finance issues and come out the other side without being the worse for wear.

 

Optimistic About Scottish Property Development Finance

Optimists abound when it comes to property development and it’s worth looking at who the real optimists are. After all, can they all be wrong?

There are several visible changes that have taken place in Scottish property development and the money exchanging hands within this industry too. Despite the attention it has drawn, few have indicated that any of this is harmful.

Until recently, Scottish property development projects have attracted a significant proportion of investors from abroad. Overseas investors dominated the market during 2017 and continued to do so during 2018. The Brexit word certainly didn’t scare them off.

 

Changes in Corporate Tax Relief

There have been some concerns that since the chancellor has moved to scrap corporate tax relief for foreign property investors that interest would wane. The expected drop in Scottish property development and the related property development finance has not happened.

What is also happening is that UK investors are looking north once more. Probably because they expect to enjoy better returns on their investment and get more bang for their buck.

Miller Matheson, executive director of CBRE, has made his views clear. In Scotland, the market has developed a resilience in remaining buoyant despite the “cloud of political uncertainty” for years. This has meant that the concerns over Brexit have not made a material difference to the investment climate north of the border.

While director of the Scottish Property Federation, David Melhuish, pointed out that the wider issues on Brexit were “too clouded for a real picture”,  Mr Matheson points out that this is unlikely to make an impact of note on the market.

 

Property Development Finance – UK-Sourced

What is interesting, though, is that there is an upsurge in funding from within the UK. Effectively, money from within the UK is now entering the property development market in Scotland. This could be the crucial factor in growing the market when changes to tax benefits for overseas investors become a reality.

Scottish property development finance is beginning to originate from with the UK.  And it’s growing. This development is potentially going to become the bedrock on which future project funding is built.

The property development industry in Scotland has been heavily influenced by foreign investment. Consequently, many will see the changes as an opportunity for new UK investors. Property development finance is available through highly skilled professional brokers.

High street lenders and mainstream lenders are making funds available for this market. A good property broker will, however, be able to guide new Scottish property development investors. Alternative financing, if it is needed, can be sourced.

 

Finding the Best Broker

Belgravia Property Finance has extensive experience in sourcing excellent private finance deals, with specialists able to assist in Scottish property development finance and bridging loans. Always seek out an experienced and reputable broker such as those at Belgravia Property Finance.

When investing in property development, it is best to ask a niche specialist. For development property finance you can rest assured that the consultants and brokers at Belgravia will be able to guide you, especially to find the right bespoke arrangements for you.


Irish property development financing
Feb
16

Time Is Ripe For Irish Property Development Financing

There is so much going on in the Irish property world that it is quite difficult to know where to start. Barely two months into the year and the Irish property journals, blogs, and newspapers are all brimming with a positive outlook.

Irish property development financing is now a viable short and medium-term investment. That doesn’t mean that there are no problems in paradise, but overall, Irish property is doing well.

All the activity, growth projections and the Government announcements relating to infrastructure investment indicate that Ireland is the place to be at least for the next decade.

 

Faith in the Future

When the government puts forward its plans to make a substantial dent in the housing shortage, things begin to change. This is exactly what has happened in Ireland.

Towards the end of 2017, the Bank of Ireland announced that it would be providing €1bn for property development in the Republic. This kind of approach fuels the optimism in the market countrywide.

This is more than four times more than the €250 million that was made available in 2014. Definitely signifying a substantial shift in development confidence.

After the tracker mortgage debacle, the Bank of Ireland has continued to identify accounts that will enjoy redress. This means that 14,500 customers have now been identified as having been impacted by the problem since 2010.

And an additional 6,000 customers having been identified for redress. This shows that there is good faith in the property industry and the banks are working hard at said redress.

The bank has now adopted a policy where proper home building strategies will be encouraged and financed, rather than the land hoarding of the past which may have contributed to stagnation in the property development industry.

Property development financing has already included the financing of over 3,500 housing units and 1,500 student beds. They have clearly positioned themselves to grow this area of their portfolio.

 

Government Investment in Infrastructure

The Irish government has allocated a €116bn investment into future infrastructure including housing, health, and environment. This has been planned over the next two decades.

Private industry is therefore taking the cue for a surge in the market. With the knowledge that new infrastructure will be built by the government, private business is now prepared to get on the bandwagon.

 

Dublin – Roads Paved with Gold

Recent figures indicate that Dublin commercial rents are now as much as six times higher than they are elsewhere in the country. They are also rising and expected to reach an increase of between 5% and 6% during 2018. Prime industrial rents are expected to rise by as much as 7% across the capital.

During 2017, there was a record uptake of commercial property leasing, especially offices, indicating an increased demand. The domino effect that can be expected from this is a kneejerk reaction coming from industry to prevent a shortage and any related crisis this may precipitate.

The jury is still out on whether office space will continue to be scooped out or whether vacancies will increase. Property professionals don’t agree on the details. Quality office accommodation is expected to increase in demand even if overall occupation decreases.

 

What This Means For Irish Property Development Financing

The ongoing growth in the Irish property market has been fuelled by government investment. This is an indicator that development opportunities will abound over the next few years. It can be expected to continue almost certainly for the next decade.

Catapulted by the government’s commitment to invest, Irish property development financing is likely to become a catalyst for the privately funded market.

Access to investing in the Irish property development market does not need to be difficult. Sometimes, when gaining access as a UK investor, hurdles can be experienced. It doesn’t really have to be once the property development financing has been arranged.

This is usually sourced and managed by an experienced, resourceful, and reputable broker or financial advisor. Belgravia Property Finance has an excellent network of both investors and financiers who offer private finding. Whether you are looking for a mezzanine loan, Irish property development financing, or Irish bridging loans, Belgravia are the people to speak to.


Irish Property Development
Feb
09

Irish Property Development or Buy To Let in Ireland?

When deciding whether to invest in property in Ireland, whether you are a local or foreign investor, you will want to decide where you want to place your investment. Should it be in Irish property development or should it be in Irish buy-to-let opportunities?

Both are currently excellent opportunities so making the decision will depend on your approach to investment and what you want to get out of it. It will also depend on how long you want to be locked into the investment. Alternatively, perhaps you’d be interested in a blend of both approaches.

 

Irish Property Development

For most developers, the investment is a turnover project. Property developers will invest in a project to turn it over, make a profit, and then start with a new project investment. This makes property development projects a short-term, high-return investment for most.

Investing in Irish property development is no different. After the 2008 crash, property development became the pariah of Irish investments. Those that understand economic cycles, however, understood that with recovery the Irish property development market would return. And so it has.

 

Track Records Matter

Once bitten twice shy may be a common idiom used in daily language. Many use it when it comes to investment too. However, the Irish government demonstrated one of the most invigorating post-2008 recovery strategies.

When a government displays an economic strategy that brings life back to markets that few thought would recover then both short and long-term investments become a worthwhile risk.

You will hear words like bubble and cycle and all sorts of other terms that may strike the fear of God into you when researching Irish property development. Remember that this should happen regardless of where you may choose to speculate.

Irish property investments currently rest on the backbone of supportive policy from the Irish government. As recently as 2017, new tax breaks have been introduced that favour investors, including those that buy to let.

This is happening while the UK government is tightening the thumbscrews on landlords. It would be unsurprising if property investors and developers start to migrate across the channel, especially in the wake of Brexit.

 

Funding for Irish Property Development

As property developers grow their portfolios, they also tend to tackle bigger and better projects. There should always be a good capital return on completion of a project. These returns, however, slow profit growth when they are used exclusively to develop the next project.

Using the returns to fund the next project makes sense. The size of the next project can also be substantially increased when quality funding is sourced. Short-term funding such as mezzanine funding and bridging loans all make up part of the property development funding. This is the type of funding that turns projects over rapidly. Done correctly, this produces high yield returns.

 

Finding a Good Broker

You may think that you have scored a bonus when you find a funding source that can provide you with excellent bridging loans and, in some cases, mezzanine funding too.

However, an experienced consultant that can help cover all aspect of Irish property development finance will help to carry you through the ups and downs of the development project and what happens when cash flow gets tight.

Advisors and brokers such as Belgravia Property Finance can also help you to source invoice trading. There are also other quick business finance that the high street cannot offer. For a broad spectrum consultancy on all your needs throughout your development project, contact the specialists at Belgravia Property Finance for that extra personal and confidential consultation.


Property development loans in Dublin
Feb
02

Market Growth – Property Development Loans in Dublin


The devastation that the 2008 crash brought upon the Irish property development market is no secret. In fact, there were conversations about whether it would ever recover.

Of course, there are half glass full and glass half empty people. The dire impact on the Irish economy did, to some extent, feed the pessimism of the glass half empty folk. The availability of property development loans in Dublin are now emerging as new growth is stimulated in the recovery.

Irish Recovery from the 2008 Crash

The Irish government nevertheless displayed a spectacular courage and strategy to resolve the economic crisis of the time. In fact, the admirable recovery is often cited by economists worldwide about to do something right.

The one very evident consequence was the stagnation of property development in the immediate aftermath of the 2008 crash. This lead, in subsequent years, to a high demand for property simply to accommodate population growth and movement.

Together with the progressive recovery, the Irish government empowered the property development loan as a phoenix rising from the ashes. Although there are slight fluctuations in growth, the Irish property market remains promising. Property development has again become a favourable investment.

UK Political Activity

It could be argued that political activity across the Irish Sea, such as the UK referendum on Brexit, has influenced this growth even further. Together with Ireland’s apparent political stability, the capacity of her government to lift the country out of economic crisis and ongoing growth, Ireland is becoming a favourite investment location once again. The demand for property development loans has resurfaced in the Irish Republic.

Demand for Property Development Loans in Dublin

Mainstream banks continue to have stringent criteria that will sometimes exclude property developers that need more flexible lending. Irish property developers continue to look for funding outside the high street and private funding has become available again.

Funding for commercial and residential property development loans in Dublin is reaching new levels in terms of demand. This could be because the proximity to the UK makes Ireland an attractive investment without all the speculation surrounding the Brexit process.

Ireland desperately needs an increase in available property. As developments increase, the demand for property will grow, fuelling the development market. There are those that argue that the uncertainty in the UK will have a negative impact on Ireland. Thus far it seems that the opposite effect has taken place.

Property Demand and Price Increases

Ireland needs more homes than it has available. There is substantial government sourced funding available for social housing. There is also a clear demand for private investment in property development loans.

The rise in house prices is indicative of this growth and the expected continued growth over the forthcoming years. If anything, Ireland is set to boom. Those looking for a way around the UK departure from Europe will look to their closest neighbour for resources and business growth.

Get a Good Broker

Experienced brokers are once again able to source some of the best Irish Property development loans in Dublin for investors seeking to develop and make a sound profit on property development. It’s a win-win situation for both the borrowers and the lenders. Even while mainstream banks are avoiding being drawn into the demand.

Belgravia Property Finance can source funding for developers and refer excellent development prospects to private financiers. With exceptional experience and a sterling reputation, they are a really good choice for advice and support.


Jan
29

Auction Finance – Solutions For Quick Property Purchase

Property developers attend auctions to weed out some of the best investment opportunities available. Auctions, however, present a multitude of complexities that do not come with mainstream property purchases.

Financing an auction property can bring with it headaches and technical problems not seen in traditional property purchase scenarios. Auction finance is specifically geared to deal with these issues.

 

Auction Finance – What’s the Difference?

Most commonly, auction finance is a form of bridging finance. It allows the property purchaser some breathing space to get more traditional forms of finance in place.

In some cases, the finance must be completed quickly to secure the auction sale. The loans are usually secured against the property that has been purchased or other property that the developer already owns. The idea is to make the funding available as quickly as possible to allow completion.

Funding can be confirmed within hours. This is in complete contrast to the days or weeks that financing can take in traditional situations. The process is less onerous, and lenders will be more interested in the security available.

Auction finance sources will also lend to individuals who are self-employed as well as limited liability partnerships, limited companies, partnerships, sole traders, and employed individuals. Their scope for consideration is far wider than the average high street bank.

 

Not Just A Bridging Loan

Auction finance does not always involve bridging loans, however. When an investor or property developer sees a property they would like to purchase at auction, they can prepare financing ahead of time.

Mortgages and buy-to-let mortgages can be agreed in principle well before the hammer falls. This places the bidder in a position where they will know where their funding limits lie. Situations where the bidder knows their maximum bidding threshold places them in a position of strength.

Auction sales move very quickly. Especially for those new to them, it can be nerve-wracking and overwhelming. When the hammer drops, 10 percent of the price has to be paid up front.

Under most circumstances, the balances will be settled within 28 days. It is usually the 28 day period that necessitates auction finance in the form of a bridging loan.

If a mortgage has been agreed in principle and where it is being secured on either the purchased property or other assets, it is on rare occasions possible to finance immediately using a mortgage agreement.

To achieve this, you may need an experienced advisor broker. Your broker will know which finance companies work the fastest to ensure completion on time while still meeting all the requisite legal requirements.

 

Commercial Property

Auction finance is not only available for residential property. A business may want to extend its premises or buy new premises at a different location. If it is expanding, there may be good reason to buy additional properties.

Commercial property financing is also available under auction finance and is a good avenue to purchase value for money property. In the same way that individuals may want to seek a mortgage, it is probable that a commercial purchase at auction will require both bridging finance and a commercial mortgage to obtain the property.

If you are an individual seeking to buy a second home or a business purchaser for new manufacturing premises, good financing advice will be crucial. Established and reputable brokers will be well networked and able to find you a good deal.

Whether you wish to use a traditional lender or will need to find a private lender, Belgravia Property will be able to guide you along the way. For confidential unbiased advice, contact our London office.


Jan
26

Construction Finance – Why It’s Critical For Property Development

Developers quite often only pay their construction contractors between 60 and 90 days after they are invoiced. This means that construction businesses only have their invoices settled well after project completion.

Because of this quirk in the property development industry, construction businesses can experience a bottleneck in their cash flow. This is where construction finance can change the speed and efficiency of a project. It also means that managers don’t have to worry about cash drying up.

There are several different ways in which construction firms can access working capital to complete a project. This is particularly important for businesses that may be working on more than one project at a time. Late payment from one client could cause a bottleneck in funding for another project. Invoice discounting is also known as invoice trading. This method means that construction businesses can release funding to keep their projects afloat.

 

Invoice Trading As A Construction Finance Vehicle

Invoice trading is a straightforward method where a business can sell an individual invoice to release cash. As modern technology has advanced there are online invoice trading platforms where this is easily applied. It is a type of peer to peer trading, except the principles of traditional invoice trading are applied.

 

Application And Verification

Businesses apply only to join the virtual platform. This is very similar to when they would approach an agent in the real world. Approval is then processed, either by the online platform or by their traditional agent.

Either route can be chosen. Invoices for sale are verified and you’re good to go. Invoices can be as low as £1000 and can exceed £1 million. The invoice is then paid by the client into a client account which has been opened specifically for that purpose.

 

Sales Of The Invoice

Individual investors can buy the invoice. Alternatively, it could be sliced up and a share of the invoice sold to multiple investors. The proceeds of the sale usually add up to around 90% of the value of the invoice.

They will then become immediately available as cash for the business that has sold the invoice. As the invoice is paid, the proceeds are distributed to the investors by the trading platform or the conventional agent.

 

Online Trading Platforms – The Advantages

The most tangible advantage with online trading platforms is speed. Communication in the virtual world is instant and investors will be able to see a new investment opportunity immediately. Businesses that have sold one or more invoices will be able to access their funding within 48 hours. In this fast-moving world that is rather spectacular.

Invoices that include foreign debtors can be both funded and traded with ease using an online platform. Online platforms permit individual invoice trading rather than having to trade the entire ledger. This usually happens with invoice factoring. The construction firm seeking that finance gets the breathing space required without having to sell their entire book.

A combination of speed, flexibility, and an online support system means that online invoice trading makes the process quicker.

 

Other Considerations

Invoice financing provides better alternatives to credit cards, loans, and other traditional avenues. Invoice trading means that the construction firm can continue its day to day running without incurring growing interest payments and penalties that occur as a result of their clients not paying them on time.

It also means that delays in projects are avoidable. Penalties that are tied to their own contracts are avoided as a direct consequence.

 

When To Use A Broker

Many firms are still wary of using online methods. Their regulations will require that a financially competent person deal with their invoice trading.

A good broker will know where the best place to go to trade invoices will be. This is because every business is different. A contractor seeking construction finance will differ, whether they are plumbers, bricklayers, or core contractors.

Always seek advice before deciding about invoice trading. Particularly when seeking urgent relief in construction finance.


Jan
25

Development Finance Rates

Each Development Finance Loan is Unique

When it comes to development finance rates, each and every development loan is priced according to a number of factors, making most development finance loans individually priced, but within a set of parameters which determine to some degree the ultimate interest rate.

Rates for UK-based projects normally start at around 3.5% over Bank of England base rate or Libor. However, pricing can steer off-course when factors outside of general lending policy are part of the application, or if funding is provided from a non-bank funder, this may add to the overall cost of borrowing.

Equally, when circumstances favour the developer, such as pre-sales or a low loan to value loan, then lenders may be able to offer rates lower than advertised or promoted rates.

 

Belgravia Finance Brokers

At Belgravia Finance, we make it our priority to know lenders’ criteria inside out, so that when placing a new enquiry, we are well aware of what the rate should be for a given deal, which often is far more complex than the average loan.

Below is a handy reference guide for all property developers wondering what interest rate might be possible for a given development based on loan size, loan to cost, and loan to GDV. It does not take into account any additional criteria, development type, or location, but it is suitable as a guide.

 

Below is a Development Finance Rates Guide for UK Property Development

Loan Size Loan to Cost
(LTC)
Loan to GDV
(LTGDV)
Rate (margin)

Per annum

Lenders Fee Exit Fee
£10m+ Up to 60% 50-55% 3.50%+ 1.25%+ none
£250,000-£10m Up to 60% 50-55% 4.00%+ 1.25%+ none
£3m-£40m Up to 60% 60% 5%+ 1.25%+ none
£3m-£30m Up to 70% 60% 4.5%+ 1.25%+ 0%-1%
£5m-£100m+ Up to 80% 60% 5.65%+ 1%+ 0.5% / per 6 months
£5m-£100m+ Up to 90% 60% 6.5%+ 1%+ 0.5%+
£5m-£100m+ Up to 90% 80% 7.5%+ 1%+ 0.5% / per 6 months

 

In order to know what development finance rates your development will qualify for, please contact a specialist finance broker at Belgravia Property Finance to discuss your development. Initially, Belgravia Finance can provide an indication of costs after an initial fact find by phone, then detailed development appraisal and further information will be required.

For development projects that have complexities, you can expect rates to be higher, but not always – this very much depends on the lender and loan amount.

 

Here is a list of key underwriting concerns that will help a lender to price a loan

Location
Location, Location, Location – it always matters.

Loan Amount
Generally the higher the loan, the lower the rate.

Borrower Experience (Director/Beneficial Owner)
The more experience, the lower the rate.

Loan to Cost
The lower the loan to cost, the lower the rate.

Loan to GDV
The lower the loan to GDV, the lower the rate.

Proposed Exit
Pre-sales or pre-lets will be key to obtaining a lower rate. If the development will be retained then evidence of long-term refinance will be required.

Value of Units per sq. ft
Lenders may have a comfort level, say they lend on properties with a developed value per sq. ft not exceeding £1000, you should be well within their maximum range.

Area Demographics
Clearly, any development must be suitable for the area i.e. student accommodation near to a university that needs new student housing, residential accommodation in an up and coming area popular with young professionals.

 

The Building Contractor

Also, any contractor appointed should have a proven track record and accounts to prove turnover, which is expected to be significantly higher than the turnover from the project being funded. Each lender has their own criteria relating to contractors.

The above are just some of the factors to consider when choosing which lenders should fund your project. Remember, it should never be only for the lowest rate on the market. Finally, it may be that the lowest rate available is also from the ideal lender to work with.


Jan
24

As Brexit Looms Closer Will It Affect Overseas Mortgages?

 

Overseas mortgages are one of those financial products that we’ve all heard of, but probably don’t know all that much about. Most us may even have friends that hold an overseas mortgage, as the British continue their love affair with France and Spain. The “big referendum” has certainly not dampened interest in the European property market and the demand for overseas mortgages has certainly not dried up.

 

Understanding Overseas Mortgages

An overseas mortgage is a mortgage that is held by a UK resident and secured on a property outside of the UK. The property could be almost anywhere. Most overseas mortgages held by UK nationals are in the EU. Receiving an offer on an overseas mortgage is a bit of a paradox. It’s the same but different. The lenders, as always, are interested in the two main criteria. Affordability and the property that the mortgage is secured upon.

The most common route taken by UK nationals to obtain an overseas mortgage is to remortgage their current home in the UK. This will then pay a substantial deposit on the foreign property that they wish to purchase. When a foreign national buys a property in Europe two factors are a common thread. Lenders demand higher deposits and the interest rates are usually lower than in the UK.

 

Before Brexit

While the UK remains part of the EU, favourable terms will be available for citizens of the common market. There is, however, much uncertainty being expressed over what lies ahead. Property professionals, brokers, agents, and lenders seem to think that little will change.

Interest in the market seems to have escalated since the infamous Brexit vote. It’s almost as if there has been a bit of a last minute rush. There are a number of UK families that see themselves relocating before Brexit takes place.

 

Local Lenders

UK banks can and do provide mortgages outside of the UK. If they have an office in that country, then it is perfectly possible for them to lend in that country. That does not mean that they will offer the same terms as they might in the UK. Borrowing abroad also doesn’t mean that the lender is subject to the regulations as laid out by the FCA. High street lender or not.

 

Foreign Lenders

It is likely that local lenders where you want to purchase a property will be able to offer you a better deal. Specialist brokers will help you to find the best available deal. The terms may be even more favourable than those you would get with a UK lender. Across the Eurozone, there are countries that have much lower interest rates.

 

After Brexit

The rush for EU property has been fuelled by the motive to obtain fixed favourable terms for overseas mortgages extending beyond the departure of the UK from the EU. That, however, is only part of the story.

Property professionals are optimistic. Most believe that little will change and that the financial relationships will continue much as before. There seems to be little advantage for either side to sever the ties that bind. It is probable that UK nationals will still enjoy some free movement and that Britain may well remain part of the EEA.

 

Currency and Exchange Fluctuation

Factors such as currency exchange may have the greatest influence on overseas mortgages. The pound took a downturn shortly after the referendum. This took a few property purchasers by surprise midway through a deal. When the homeowner is paying the mortgage in sterling, currency fluctuations will influence affordability. This is something that both the lenders and the borrower must consider carefully.

Considerable strengthening or weakening of the currency used to purchase the property will also influence the long-term return on the property. Buying a property abroad may seem to be an exercise in borrowing money to make a purchase. Considering how much the property will be worth on completion of the mortgage is something that some fail to consider.

There will always be hoops to jump through when funding a property purchase in a country where you don’t live. There are always options to achieve a good funding deal to suit your circumstances. Belgravia Property Finance can offer specialised advice and help to broker deals that are not available on the high street. Contact Belgravia Property Finance for a confidential discussion on the way forward.


Jan
22

Business Loans and Alternative Financing

Small businesses and businesses under five years old struggle the most when it comes to sourcing affordable funding. Even medium-sized enterprises experience cashflow bottlenecks. There are different types of business loans and finding the right one for your business will involve some research.

Better still, by turning to a broker you are more likely to find one quicker. Brokers have an intricate understanding of who lends money to whom and on what terms. For the average borrower, approaching lenders directly can be a real hit and miss scenario. Especially if they’re new at it.

Reasons for funding come in a variety of shapes and sizes, much in the same way that individuals have diverse reasons. Vehicle financing, relief for their cash flow, or to increase productivity. Some business loans will be to fund the all-important research and development. The saying that you must spend money to make money is not lost on the entrepreneur.

 

Business Loans for Startups

Businesses come in different shapes and sizes. The variety of products and services available in the commercial world go as far as the imagination can stretch. With this variety there is a lender to provide for every need.

The startup loans company is a good example of a lender filling a niche. Most new businesses and startups struggle to obtain business loans because of the lack of trading history. A real chicken and egg situation for those that need the funding to trade purposefully.

 

Security

Unsecured loans are really very difficult to find, even for those that have been trading for several years. Most loans will be secured in one way or other. Asset finance is a favourite way for lenders to provide financial assistance to young businesses. Loans are otherwise secured either on property or by a guarantor.

 

Asset Finance

When considering assets, a lender will not only consider machinery and fixed property as security, but may also look at existing orders that have come in. A business that needs additional machinery in order to fulfil those orders will negotiate a deal with the lender. The lender will then secure the loan against the orders and the machinery that has been financed. On occasion, lenders will lease the machinery to the borrower and set a different loan structure to make it more viable for the borrower.

High street banks and conventional lenders are particularly shy of new businesses and startups that have not started trading. Businesses that have been established for more than two years struggle to convince bankers to lend them money. Less conventional lenders and private financiers provide better options and will consider business loans with terms that match the risk.

 

Find a Good Broker

Brokers know the market well enough to know where not to waste the client’s time. A startup could be seeking out finance for anything from £500 to £5 million. Where they turn to for that business loan will depend on the industry, the business plan, the viability, any assets that they already have, the experience of the core leadership of the business, and more. Lenders have different criteria, especially private finance lenders.

 

High Net Worth Individuals

High net worth individuals sometimes need loans to participate in a new business venture. Usually, this is because they have their capital locked up elsewhere. Even those with a lot of money will sometimes need to lend money. In fact, it may be more prudent for them to borrow money than to liquidate any of their higher performing investments.

Businessmen and women are usually good at their trade. They need someone that is specialised in business loans and finance to help them fund their business and move forward. Instructing an experienced business loans and finance broker means that the business leadership can get on with running the business while the broker finds them the funding.

For a confidential discussion about your business funding needs, contact the experts at Belgravia Property Finance.


Jan
19

Offshore Mortgages – Better Than A Well Kept Secret

One of the frustration that UK nationals living abroad experience is that the nature of their work dictates that they are non-domiciled. The dream of owning a home in the UK can become complicated without the correct advice. Offshore mortgages are very different products to ones offered to UK nationals that live and work in the UK.

Tax laws have been tightened over the last decade that also makes this area of lending even more complicated. A person can be resident in the UK, but non-domiciled. Having a UK-based employer that pays them in sterling may make obtaining an offshore mortgage easier. Even having a non-UK employer that pays in sterling into a UK bank account may make things easier.

The real headaches begin when the UK resident, that also happens to be non-domiciled for work purposes, is paid in foreign currency by a foreign employer. Add to this the complexity of fluctuating exchange rates and you’ll understand why the banks waver when offering offshore mortgages. Most offshore mortgages that fund property purchase inside the UK are funded from lenders based in the Channel Islands.

 

Offshore Mortgages – Varying Terms

Offshore mortgages are not regulated by the FSA, and before accepting one it is important to check with both your broker and tax advisor how vulnerable you are. Privately funded property purchases are essentially contracted in a way that the contracts can vary from one deal to the next.

This means that there are few hard and fast rules about how your funding agreement will be structured. For most that take this route, the convenience and access to funds combined with the expected long-term investment outcome more than sufficiently compensate for this.

 

Foreign Residents

UK resident non-domiciled British nationals are not the only people that seek out offshore mortgages. Foreign residents in Britain may struggle to find a high street bank to finance their property purchase. Anything from abandonment risk to loss of residence status makes the mainstream shy away. In fact, very strict internal regulations, as well as regulations dictated by the regulatory bodies, can make funding a property difficult. This applies whether the person is a high net worth individual or a foreign company or organisation.

It’s hard to tell what kind of impact Brexit will have on this market. The face of immigration and emigration is surely going to change. How it affects the property market is yet to be realised. Speculation can and will affect product availability but will not shut it down completely. The property market is here to stay whether it is buoyant or somewhat deflated. All lenders, whether they are private financiers or high street banks, care primarily about two things. The value of the property and the capacity of the borrower to pay the mortgage.

 

Non-Resident – Non-UK Nationals

Another group that is often forgotten when it comes to offshore mortgages are the non-residents. Non-UK nationals that are also non-resident but have a vested interest in purchasing property in the UK also struggle to find property finance. This may be for an investment or for a longer term plan to eventually settle.

Foreign companies based abroad may also fall into this category. Offshore mortgages are particularly attractive to these groups and they make excellent prospects for private finance lenders.

Because offshore mortgages are a specialist product, it is unwise to try and negotiate the terms yourself. It is a good idea to find an experienced broker that will not only find you the best funding source for your circumstances but will also be able to negotiate the best possible terms.

 

Seek Advice

Belgravia Property Finance offers advice and access to funding that may otherwise be difficult to find. Access is offered to UK nationals that are resident but non-domiciled. This includes expatriates living abroad. This group includes non-UK nationals and companies living or operating in the UK. Additionally, foreign individuals and companies that neither live nor operate in the UK.

To find out whether you would be able to access alternative property funding, contact the professionals at Belgravia Property Finance to make a confidential enquiry.