News & Views

Fincorp offers light refurb bridge

Fincorp is now offering a light refurbishment bridging loan after seeing strong demand for finance to fund auctioned properties. The loan is suitable for properties needing modernisation or the addition of facilities including a kitchen or bathrooms and which wouldn’t qualify for a buy-to-let mortgage under existing criteria in the market.  The minimum loan size is £100,000, funding is available up to £5m and the costs of refurbishment must not exceed 20% of the value of the property.

Nigel Alexander, director at Fincorp, said: “Short-term funding is the life blood of auction finance and it’s a market we’ve been dealing with for 25 years.

“In the past buy-to-let lenders were the dominant force for this sort of lending but as with the wider market, they’ve cracked down on criteria and there are good deals they just won’t lend against.

“Our light refurb loan is designed with developers in mind and offers flexible finance fast to allow clients to buy undervalued properties, do them up and either refinance onto a buy-to-let mortgage or sell them on.”

The lender is also offering to do a 50:50 split on refurbishment costs with the borrower, giving much more flexibility to developers looking to employ their own capital efficiently.

Chris Coleman-Smith, lead auctioneer at Savills, welcomed Fincorp’s commitment to the auction market.

And he said: “Auction properties are usually in need of some updating and the type of finance Fincorp brings to the table is critical for buyers looking to get a deal done.

“Finance has to be fast and reliable in this business because you put down a deposit the day you buy. Bridging has become the first port of call and with Fincorp, buyers know they’ll stump up the cash.”

Brokers referring business to Fincorp have direct access to decision makers and can speak to any of the directors to get reassurance that a deal will go through.

“Knowing that you will get an almost immediate decision in principal is mission critical for people buying at auction,” added Alexander.

“Even if buyers can get a mainstream mortgage, the application and approval process is so drawn out that they’ve lost the property by the time the lender delivers. Bridging fills that gap and makes the difference between a done deal and a dead deal.”

The fee-free product, which has a negotiable monthly rate and maximum loan to value of 70% irrespective of purchase price, is available immediately and is being showcased at Savills’ upcoming auction on 17 June 2013.

Fincorp boosts presence in Brighton

Fincorp has announced it is boosting its lending down in Brighton and Sussex after hosting a successful roadshow at the Hove Club in the city.
The roadshow, held earlier this month, saw around 50 property developers, architects, estate agents and mortgage brokers come together to network with each other and learn more about how bridging could support property business opportunities in Brighton.
Nigel Alexander, director at Fincorp, said: "Brighton is known as 'London by the sea' and our experience of meeting property professionals at our roadshow suggested there are a lot of great opportunities for us down here.

"Many of our lending competitors claim that they lend in this area but chatting to these people, we are convinced that we can do more to support the property business in Brighton - especially because the underlying economy there is strong, it has excellent transport links and quality housing stock."
One of the roadshow's attendees, property developer Tim Harding, said the speed and reassurance of finance offered by Fincorp was "essential" to his ability to do business.
He said: "I've been a property developer in the area for more than 20 years and in my experience bridging funding is essential in this market place.
"You need to be able to move fast and efficiently to buy a property today and also you need the credibility of having funds available to you."
Harding said the problem with retail bank funding was that lenders were tying developers up in red tape, often resulting in deals falling through because finance was not forthcoming fast enough.
"In this market the necessity of having to sit through retail banks' credit committees and the like means that you could find you've lost your deal," he added. "Credibility in terms of making sure that you can fund a deal when you say you can is everything if you want to continue in business."
Harding has been dealing with Fincorp for 10 years and said they "really are a cut above the rest".
He said: "They will always give you a yes or a no straightaway and a yes will always remain a yes. That gives me confidence to buy properties and know I don't have to chase the lender continually as they deal with everything in house and I know the funds will be available within a very short space of time."
Wayne Priddle, a partner and valuer at Carr and Priddle, said bridging is "back to basics common sense lending" and added that the area was in need of reliable sources of finance.
He said: "Since the credit crunch we've noticed a massive reduction in the ability and desire to lend money, particularly in property development. A number of the banks seem to have totally withdrawn from those areas.
"There's a clash between what the government wants banks to do and what they seem able to do because their criteria is so restrictive and there is a huge pent up demand for residential and commercial development in Sussex."
Mike Gibson, an independent commercial finance broker and property consultant, said: "The problem we have in the market at the moment is that funds are in short supply from the main lenders and where they are available, it often takes two or three months for decisions to be made and money to be released and that's no good for most people. Bridging lets people buy, do up and sell property and get those deals done."
And Jon Turner, a local architect and developer specialising in small residential developments, said: "Short term facilities are great because it allows us to take advantage of deals when we come across them without having to go through formal procedures over and over again."
Alexander said Fincorp is keen to do more bridging loans in Brighton and is urging brokers in the area to get in touch directly with him or the other Fincorp directors if they think they have a suitable deal.
"We are also thinking about holding similar roadshows further afield in the future as we're keen to support the property market by funding good quality deals beyond our homeland of London and surrounding areas," he added.
Fincorp has extensive resources of its own to lend, thereby giving the directors the ability to transact quickly and efficiently. They don't charge fees at all and don't have to wait for one loan to redeem before releasing funds to another deal.
Harding said this aspect of dealing with Fincorp was critical as his experience with some other bridging lenders had been that they were punting his deal out to lots of different lenders, adding fees onto the front end and sometimes failing to see the loan through to completion.
And he added: "With Fincorp that's not the case at all. You know they have the money and when they say they'll lend they do."
Fincorp charges a flat monthly rate of 1.5% with no fees and brokers are paid a 1% fee directly from the lender the day the loan completes.

Fincorp gets developer out of a tight squeeze

Bridging lender Fincorp has completed a £900,000 loan secured over two Gloucestershire properties, enabling the conversion of a chapel into a recording studio to be used by a member of 70s band Squeeze.
The deal was brought to Fincorp by Chris Dailly from Jumbo Bridging who had agreed a £625,000 first charge loan on a third property with Hope Capital but needed another lender to help his client secure the whole development.
The property was formerly owned by the local diocese and is made up of three separate buildings - the guest house and the lodge funded by Fincorp with a combined valuation of £1.5m - and the convent, funded by Hope Capital.
Matthew Anderson, director at Fincorp, said: "This deal was a no brainer for us. The borrower is a serial entrepreneur and has developed various residential properties as well as hotels.
"He needed a short-term loan to develop the lodge and guest house to sell on as well as converting the convent to his own home and the chapel into a studio - he's mates with one of the group Squeeze!"
Anderson said the deal made perfect sense to Fincorp as the borrower already has buyers lined up to purchase the properties after refurbishment.
Chris Dailly of Jumbo Bridging added: "We specialise in large bridging loans and this property certainly fits the bill. It's a quality opportunity to work with a quality developer.
"We're an entrepreneurial business and we choose to work with Fincorp because their ethos matches our own - they're no fuss and eager to lend.
"They've also been in the bridging market for many years and have a no nonsense, speedy approach to financing deals. They're a trusted partner."
Jumbo Bridging is a specialist large loan master packager arranging bridging finance on behalf of other brokers as well as for developers directly.
Fincorp has been lending for 25 years in the bridging market and charges a flat monthly rate with no fees to pay at all.
Brokers earn 1% proc fee on the deal paid directly from Fincorp on the day the loan completes.