Don’t Overlook the Overdraft

I’ve seen first-hand how creativity and quick decision-making can make or break an investment. In a property market where opportunities appear and vanish in the blink of an eye, the ability to move swiftly is no longer a luxury so don’t overlook anything including overdrafts.

One way that investors can act quickly to make the most of new opportunities is through fast access to capital with a pre-agreed drawdown facility that works much like an overdraft. This approach provides investors with a revolving line of credit that they can dip into, repay, and redraw as needed. This flexibility enables investors—rather than being locked into a rigid repayment schedule—to access funds incrementally, giving them the freedom to act swiftly when opportunities arise.

Timing, as any experienced investor will tell you, is of the utmost importance. Consider auction purchases, where buyers typically have just 28 days to complete, and traditional lenders often can’t keep up. An overdraft facility offers immediate access to capital, enabling clients to complete transactions smoothly, without delay. Similarly, developers working on phased refurbishment projects can benefit from overdrafts by accessing funds as needed, avoiding unnecessary interest charges on unused amounts—a crucial advantage for those managing costs on tight margins.

Speaking of cost efficiency, it’s worth noting that overdrafts stand out as a resourceful option. Traditional loans charge interest on the entire facility, even if you don’t use the full amount. Overdrafts, on the other hand, only accrue interest on the funds drawn. Think about the savings this can offer for clients who want the reassurance of available credit without the burden of unnecessary expenses.   So don’t overlook the overdraft!

Overdrafts in Action

At Alternative Bridging Corporation (ABC), we’ve facilitated countless success stories by aligning our solutions with our clients’ unique needs. Here are just a few:

Bethnal Green Tenanted Flats

In Bethnal Green, a client managing a £1.67m property with three tenanted flats faced rising costs on a six-unit industrial development. They needed £344k to complete the project but couldn’t afford delays. Using the Alternative Overdraft, secured against their investment flats rather than the development site, we expedited the process. By doing so, we avoided unnecessary legal work and ensured funds were drawn as needed. This facility not only saved time but also allowed the project to stay on schedule—highlighting how overdrafts can simplify complex situations.  Read more..

London and Brighton Nightclub Refurbishments

In East Sussex, we worked with an entrepreneurial client who needed £580k to refurbish nightclubs in London and Brighton and purchase artwork for their gallery. By securing the overdraft as a second charge on their primary residence, the client gained the flexibility to draw funds when required. We even tackled issues like resolving a missing EPC quickly, ensuring the funds were ready without any delays. This example highlights how overdrafts can help businesses stay agile and seize new opportunities as they arise.

Transformative Power of the Alternative Overdraft

As I have mentioned, auction purchases are among the most time-sensitive transactions in property investment. One of our clients, who had previously relied on bridging loans, discovered the transformative power of the Alternative Overdraft. Secured at 65% LTV against existing portfolio properties, the facility allowed them to act as a cash buyer at auctions. They could draw on funds within 24 hours, refurbish properties, and either refinance or sell them—all while reinvesting proceeds back into the overdraft. This revolving strategy turned what could have been one-off opportunities into a continuous growth cycle.

Alternative Overdraft for Developments

Developers also often face hurdles with traditional development finance, from high rates to additional costs like site inspections. One of our clients, a limited company, sought a better solution for constructing two houses. Using ABC’s Alternative Overdraft, secured against three unencumbered buy-to-let properties at 70% LTV, we eliminated the need for staged payments and monitoring surveyors. The facility allowed the developer to draw funds as needed, maintaining full control over their project timeline and costs.

The Future of Specialist Lending

The property market isn’t slowing down. As competition intensifies and regulatory pressures mount, brokers and investors need partners who can offer more than just funding—they need solutions. Overdrafts, with their inherent flexibility and efficiency, are perfectly positioned to meet these demands.

At its heart, specialist lending is about breaking down barriers and driving success. Overdrafts embody this spirit, giving brokers the tools to overcome challenges and capitalise on opportunities. At ABC, we’re proud to be at the forefront of this evolution, working alongside brokers to ensure their clients are ready to act—because in this industry, timing is everything.

Jonathan Rubins is Chief Commercial Officer at Alternative Bridging Corporation