UPDAT 018 INSIDE COMMERCIAL BRIDGING LOAN ( CBL ) Guidance Notes for Approved Brokers only. NOT for general distribution

Transcription

1 UPDAT MAY 2 ED 018 INSIDE N O I T A M INFOR COMMERCIAL BRIDGING LOAN ( CBL ) Guidance Notes for Approved Brokers only. NOT for general distribution

2 YES, WE WILL! Alternative Bridging Corporation Limited provides Commercial Bridging Loans to property investors, developers and dealers. We do it simply and swiftly. We are transparent and say what we mean and mean what we say. Broker commission is a pleasure, not a problem. We understand and structure more complicated proposals in ways to suit the borrower s special requirements. We can, and do, think outside the box. We hope this Guidance Note will provide you with a clear understanding of our terms and preferences and what information we need to get the job done efficiently and quickly. 1. Our Standard Criteria: a. We finance: First and Second Mortgages Retail, Commercial, Industrial, and Residential Owner-occupiers, Investors and Dealers The Property Industry and the Business Community b. Our Minimum Loan Size is 150,000 and our maximum is 10M with a sweet spot between 500,000 and 3M c. The Maximum Period is 24 months d. The standard Loan to Value ( LTV ) is up to 65% but can be increased for well-let properties on long leases or where additional security is provided e. Loans over 5M are Specials - see Guidance Note 4 f. We lend in England, Wales and Scotland and our BDMs have offices in Borehamwood and Newcastle-under-Lyme g. Note: We do not lend against, farms, the short-lease and goodwill of retail businesses, operating filling stations, equestrian facilities, kennels and catteries, etc.

3 2. What makes us smile: Borrowers with a good track record Loans over 500,000 but under 3M Locations with lots of chimney pots Proven income, e.g. well-let investments with a spread of tenants, profitable businesses, etc. A defined exit strategy, e.g. sale with agent instructed or refinance actively being negotiated 3. What makes us think twice (not a no but tell us more)?: Properties in remote locations Loans under 250,000 Very short leases and doubtful tenants this may limit the loan to a percentage of vacant possession value Leisure properties, country hotels, nursing and care homes Doubtful exit strategy Borrowers subject to PEP (Politically Exposed Persons) sanctions or who are resident abroad particularly those in high risk jurisdictions that intend to use funds originating in those jurisdictions to fully or part finance the transaction either at inception or at takeout 4. What we charge Fees and Interest: a. Interest Rates are from 0.675% per month regardless of LTV for loans from 250,000 and from 0.95% per month for loans from 150,000 b. Arrangement Fees and Procuration Fees ( PF ) i. Arrangement Fee 1% with no PF paid to broker ii. Arrangement Fee 2% with 1% PF to broker iii. For higher Procuration Fees refer to your BDM brokers only

4 5. Special Loans ( Specials ): a. Specials are proposals outside of Standard Criteria and will be considered individually on merit. We will try to meet the requirement but may need more information b. Specials are subject to individual underwriting c. Sighting by Credit Committee is mandatory for all Specials d. If guidelines are to be broken, please identify and detail the justification for a Special, e.g. strong exit strategy such as a contracted sale, borrowers who have meaningful other assets and significant income e. Loans of less than 250,000 need to be simple and straightforward and are for borrowers with a clean credit history 6. Credit History: a. Clean Credit History assumes: No Unsatisfied County Court Judgements No Defaults or late mortgage payments Never disqualified from being a director of a limited company No history of bankruptcy or IVA/CVA b. Adverse Credit History: Where the assumption above is incorrect, please sight the proposal with full details and explanation 7. Valuation: a. ABC Underwriting will instruct each valuation immediately the application is received b. We reserve the right to decline a previously instructed valuation unless it has been carried out by a firm on our panel or one we are prepared to add to that list. Please refer to your BDM if in doubt c. Our valuers are RICS members with at least four partners with an active, local sales and / or investment agency near to the property

5 8. Legal Due Diligence: a. ABC Underwriting will instruct one of our panel solicitors to investigate title and prepare the Loan Agreement, Legal Charge, etc. b. For commercial loans, we currently favour: Joelson Phillip Ross Brightstone Law Teacher Stern c. We will not agree to instruct the borrower s solicitor or one recommended by the introducer under any circumstances c. The borrower must be advised by a firm of solicitors regulated by the Law Society, with a minimum of three partners d. Fees are quoted individually based on the number of titles, leases, etc. e. The borrower s solicitor will be asked to give an undertaking for legal fees. Delay in providing funds to the borrower s solicitor will delay the undertaking being given and commencement of the legal process 9. Further Advance ( Top-up ) and Loan Extension: a. We will consider a further advance (within criteria) following improvement of the property, new lettings, increase in rents, etc. b. Upon expiry of the loan, at our sole discretion, we will consider extending the period for repayment 10. Interest Retention: a. Unless proof of income can be provided (e.g. rental income from the property or audited accounts) demonstrating an ability to service interest monthly throughout the loan period, a retention will be made equal to the interest payable for loan period b. In the event of early repayment, the surplus interest will be refunded c. The advance including interest retention must be within LTV criteria brokers only

6 11. Gathering Information: Most delay occurs due to inadequate or incorrect information. Please help us to avoid this by providing at outset: a. Fully completed Application Form, including Asset and Liability Statement (available to download or complete on-line) b. Tenancy Schedule (available to download or complete on-line) c. Accounts and Balance Sheet of trading businesses d. Accepted Heads of Terms so that our solicitor and valuer can be instructed e. Estate Agent s details or previous valuation (for information only) (see Guidance Note 7)

7 INSIDE N O I T A M INFOR ALTERNATIVE BRIDGING 2 Imperial Place Maxwell Road Borehamwood Hertfordshire WD6 1JN