Our short term bridging loans are for purchase, refinance, property improvement or to unlock working capital for business purposes.
This unique overdraft provides you with a flexible drawdown facility giving you instant liquidity and avoids heavy setting-up costs.
Individually structured development loans for residential and commercial projects, with finance available for site purchase, construction and fees, refinance, equity release and to provide working capital. Loans are available up to 90% of the site cost.
We have a commitment to innovation and with the ever changing financial landscape around us we have designed a range of unique Specialist Lending products that solve a range of property lending needs.
By Jonathan Rubins, Director & Chief Commercial Officer at Alternative Bridging Corporation
Refinancing is the replacement of a loan with a new loan, typically to secure better terms or release equity. Property Portfolio Refinancing can be ideal for property investors as it allows for financial arrangements to be maximised and capital to be raised for further investment. There are many refinancing options available, from rate-and-term refinancing to cash-out refinancing and buy-to-let refinancing. All are used to meet specific investment needs. However, for investors in property looking to build portfolios, cash-out refinancing and buy-to-let refinancing can be particularly useful.
Building a portfolio of properties must be controlled strategically from a financial point of view, and refinancing is used to free up capital to enable further purchases. Most investors’ buy, refurbish, refinance, rent (BRRR) strategy is to purchase properties, add value by enhancing them, then refinance at a better value.
As a lender, we offer refinancing facilities ideal for investors looking to expand their portfolios in a cost-effective manner. Our bridging loans enable investors to have instant access to short-term finance that helps them acquire properties swiftly.
A Plymouth property developer needed to re-finance a number of loans against a mixed portfolio of offices, homes, and flats, some of which possessed development potential. The portfolio was worth £3.8m with a required loan of £2.5m (66% LTV).
However, the complexity of over 30 tenancies and bringing the ownership together into one entity deterred conventional lenders due to the perceived risks.
The developers contacted Alternative Bridging seeking a customised solution. We negotiated a £2.5m refinancing loan that resolved the complexities of the portfolio. With a strategic approach involving the consolidation of assets and future possibilities, we were able to provide the capital. Long-term loans and asset sales were included in the plan in order to service existing debt and optimise the portfolio.
The £2.5m refinance facility is the repayment of clearing bank loans and simplified ownership, improving financial control and portfolio value. Refinancing with long-term loans and selective disposal of assets guaranteed debt repayment and positioned the portfolio for future expansion.
This case shows the power of customised refinancing in overcoming financial challenges and optimising investment portfolios.
One of the primary considerations when refinancing is the LTV ratio, which determines how much capital can be withdrawn. Where your client has high rental yields and well-maintained properties, they may have greater refinancing limits. As a result, they may qualify for higher refinancing amounts, enabling them to reinvest in additional assets.
For investors, a key benefit of refinancing is that it provides liquidity without the need to sell assets. To acquire capital, a sale of an asset could result in capital gains tax and high selling fees. However, refinancing allows investors to access equity with the retention of ownership in property and preservation of rental income.
The timing of refinancing is key in order to maximise investment yields. Therefore, some investors may choose to wait longer to benefit from increased property values or more rental income. Our BDMs are able to help you determine the optimal refinancing time period based on your client’s specific investment goals.
Market conditions also come into play in refinancing. With low interest rates, refinancing can result in significant long-term cost benefits. If rates are rising, borrowing fixed-rate facilities can stabilise repayment commitments.
Affordability is another key factor in refinancing approvals. Rental income coverage ratios are calculated to determine if rental income sufficiently supports mortgage repayments. Properties with strong rental performance provide greater confidence. Therefore, making it easier to secure refinancing. Investors who maximise rental income via refurbishment or effective management of tenants typically have better refinancing terms, allowing further expansion.
In some cases, investors may consider changing property use to optimise rental yield. For example, a conversion from long-term tenancy agreements to short-term holiday lets or houses in multiple occupation (HMOs) may maximise rental income, improving refinancing opportunities.
Bridging Loans play an important role in refinancing strategies for property investors. They provide short-term funds that allow for quick property acquisitions, completing restoration works, and then remortgaging onto long-term mortgage products. Bridging finance is particularly useful when acquiring properties at auction or when traditional mortgage approvals are too slow.
Our bridging loans are designed for investors who need fast access to finance in order to purchase or refinance properties and add value to their portfolios. By using bridging finance strategically, your clients can improve the value of their portfolio and reinvest in further opportunities.
The BRRR method is a popular approach to property portfolio expansion. Investors buy undervalued properties, refurbish them to build market value, and refinance based on the higher valuation. It allows them to recycle funds and invest in new properties without having to provide substantial initial cash outlays. We assist investors in applying the BRRR method through our flexible refinancing terms that help them extract funds efficiently.
One of the key components in the BRRR strategy is observing that rehabilitation adds sufficient value to justify refinancing. Investors should focus on cost-effective upgrades that enhance rental yield and appeal to tenants. This could include modernising kitchens and bathrooms, improving energy efficiency, or repurposing unused space, amongst many other options.
For clients with multiple properties, refinancing several assets at once can provide larger sums for reinvestment. We offer portfolio refinancing options, allowing investors to consolidate loans and streamline financial management. This strategy can enhance cash flow and help clients make larger purchases without liquidating existing assets.
Property portfolio refinancing can also provide the opportunity to negotiate more favourable terms, particularly for experienced investors with strong rental income. We offer flexible portfolio finance arrangements that maximise borrowing potential.
Property valuations play a key role in refinancing as they determine loan amounts based on the existing market value. In times of low market activity, valuations may be lower than expected, limiting refinancing ability. Therefore, we can help your clients tackle valuation challenges by structuring financing solutions that align with current market conditions.
Market trends need to be monitored by property investors who seek to refinance. Interest rate fluctuations, demand for housing, and policy changes all influence refinancing opportunities. Our BDMs continuously monitor industry news to offer with current guidance on optimal refinancing strategies.
With a growing need for rental property, many investors are seeking opportunities to expand their portfolios without compromising financial stability. Refinancing remains a highly effective tool in accomplishing this, as it provides investors with an opportunity to recycle capital and reinvest in new projects. Through effective structuring of funding and considering the proper timing, LTV ratios, and investment approach, your clients can maximise refinancing prospects and expand their holdings with financial confidence.
Being a trusted lender, we provide customised refinancing solutions that help property investors achieve long-term success. If you have any queries about how our bridging loans can assist your client in property portfolio expansion, feel free to get in touch with us.
Get the latest product updates and property market news delivered straight to your inbox. As a lender, we understand the importance of timely information. Sign up today!
By entering your email address, you agree to receive our marketing offers in accordance with our Privacy Policy
