More about Specialist Lending: providing finance solutions to borrowers with unique circumstances

What is Specialist Lending?

Specialist lenders provide bespoke financial solutions to meet the specific needs of property investors. These products are designed to address situations that fall outside the scope of conventional property financing. These loans offer brokers highly flexible solutions to support their clients’ diverse and often complex requirements.

Specialist lending is particularly important when encountering clients with unique investment strategies or time-sensitive opportunities. For instance, a property investor might need quick access to capital to secure a property at auction.  Traditional banks often have lengthy approval processes that can cause investors to miss out on such opportunities. Specialist lenders like us, however, understand the urgency of these situations and can provide bridging loans and specialist lending to ensure that funds are available when they are needed most.

We offer a range of specialist lending products Alternative Overdraft, Term Loan and PartX Property Finance. These products are specifically designed to support new and growing businesses, asset management scenarios, and the release of working capital. They are also ideal for purchase, refinance, and property improvement projects.

Overdrafts

The primary advantage of property overdraft loans is the financial flexibility they provide. Investors can address immediate cash flow requirements without the necessity of applying for a new loan each time a need arises. This flexibility is crucial for managing unexpected expenses, such as urgent repairs or short-term financing gaps that might occur during the renovation or development of a property.

This type of lending product allows clients to access additional funds as required, making it easier to handle unexpected expenses or to capitalise on immediate investment opportunities. Unlike traditional loans, overdrafts offer the convenience of flexible borrowing which can be particularly beneficial. As a result, they allow property investors to manage cash flow effectively.

For instance, when a business needs to undertake a renovation or improvement project, a property overdraft loan can provide immediate access to the capital required. For property developers, this is particularly useful, as renovation or construction costs are often unpredictable. Instead of applying for a new loan each time funds are needed, investors can use the overdraft facility to draw funds incrementally, in line with the requirements of the project. This ensures that work can continue without delay while avoiding the financial strain that might arise from waiting for approval from other sources of funding.

The flexibility of the Alternative Overdraft is demonstrated in this case study. In this situation, a client had acquired a development site with planning permission. However, the client had reservations about the limitations of standard development financing. These concerns included the staged payments, elevated interest rates, and the burden of additional costs, such as frequent site inspections. As a result, the client sought an overdraft in order to provide the flexibility they needed. The financing solution was structured by securing a loan against three buy-to-let investment properties at 70% Loan-to-value (LTV). The client’s exit strategy was focused around the future refinancing of the two houses post-construction completion.

This case study shows how the Alternative Overdraft can act as the go-to solution for developers in need of swift, adaptable funding.

Term Loans

Our Term Loans are up to 5 years and provides secure funding for the UK property industry and business community. These loans are ideal for supporting new businesses asset management or for releasing capital. By providing a clear repayment plan, term loans help property investors manage their financial commitments while focusing on their growth and expansion strategies.

One of the primary uses of property term loans is in the purchase and development of property. Investors looking to acquire properties that require development or significant refurbishment often rely on term loans to secure the necessary funds. This financial product allows investors to spread the cost of acquisition and development over several years, aligning the repayment schedule with the expected increase in property value once the improvements are completed.

Another scenario where property term loans prove invaluable is in the expansion of an investment portfolio. Seasoned investors often seek to diversify and expand their holdings by acquiring multiple properties. Term loans facilitate this growth by providing the capital needed to purchase additional assets while spreading the repayment over a period that matches the investor’s long-term strategy. This enables investors to take advantage of market opportunities without compromising their financial health.

In this case study, we are able to show that by utilising our Term Loan, the client was able to extend their development timeline to meet planning requirements. The client realised that a 12-month facility was insufficient in this case, and the borrower required planning approval for the property before starting construction work. As a result, they sought alternative financing. This Term Loan was secured as a first charge across the clients’ three properties in North West London. It provided the client with the necessary financial flexibility and addressed their time-based constraints. Consequently, the Term Loan not only provided the necessary funds, but also offered the critical time for the client to carry out the planned work on the properties.

This case study highlights how our interest-only Term Loans are capable of meeting the unique needs of borrowers.

Refinancing

Specialist lending products are also key in refinancing scenarios. Property investors often need to refinance existing loans to free up capital for new projects or to take advantage of better interest rates via specialist lenders. We offer bespoke refinancing solutions that align with the investor’s overall strategy, ensuring that their financial arrangements support their long-term objectives.

Conclusion

In conclusion, specialist lending options are essential tools for property finance brokers working with property investors. These products provide the flexibility and bespoke solutions required to meet the unique challenges and opportunities in the property market. By using specialist lenders you will find financing options, brokers can deliver superior service and support to their clients, helping them to achieve their property investment goals.

If you have any queries about our specialist lending options, feel free to get in touch with one of our experienced BDMs.