Bridging finance has presented a real-time solution for asset-rich, cash-poor business owners by providing a quick injection of liquidity to fulfil their funding needs.
An increasing number of business owners are taking advantage of the opportunities afforded by a bridging loan to finance acquisitions and expansions, in a bid to grow their business.
MTF recently helped a client, who required £1 million to expand their business abroad. The funds were needed quickly, so that the client could take advantage of a great business opportunity.
The client was a main shareholder in a listed company and owned a property worth £2.25 million, with an existing first charge of £460,000. However, the client’s mortgage lender refused them finance due to affordability issues under the Mortgage Market Review (MMR), a set of rules introduced by the Financial Conduct Authority (FCA) in April 2014.
As a non-status lender, MTF was not concerned with the client’s income and was able to secure a second charge bridging loan on an 18-month term at 66% Loan-To-Value, on open-market value.
The client was able to expand their business abroad, using the funds to pay for the initial operating costs. The 18-month loan term gave the client plenty of time to arrange and secure a business loan with a bank, in turn settling the bridging loan.
At MTF, one of our defining characteristics is that we are non-status lenders. We do not require evidence of trading history, accounts or proof of income. We do not judge a loan application on credit history, but instead focus on the client’s current situation and future plans.
This allows us to take a practical, common sense approach to lending, to assist business owners looking to unlock the capital from their assets.
Whether funds are needed to acquire stock, facilitate a new venture or stimulate growth, a bridging loan provides quick and critical access to business owners who are trying to raise funds.
Tomer Aboody is a founding director of MTF. With over 20 years’ experience in the property market, both in the UK and abroad, he brings first-hand understanding to the property finance sector. Tomer is the driving force behind MTF’s asset-based lending approach and commonsense attitude to underwriting a bridging loan.