While our bridging loans and BTL mortgages can accommodate a broad range of circumstances and challenges, the constantly evolving economy requires us to find new ways to serve the market every now and again.
Bridge Fusion is the most recent manifestation of this. Mike Cook, our chief mortgage officer, broke down when a borrower may utilise our Fusion product over a traditional bridging loan.
“Basically, it could be the right fit when a standard bridge isn’t cost effective over a longer term,” he said.
Bridging finance is often thought of as a short-term solution, to an immediate problem such as a chain break or auction purchase. But, there are circumstances which may call for a longer term bespoke solution that won’t hinder an investment.
“A Bridge Fusion is designed for longer periods, and for loans of up to £20m, which could save borrowers a lot of interest,” Mike continued.
“Also, for some, a standard bridging loan may be too short and hard to extend for their circumstances. Re-bridging can be difficult, and you may need serious funds quickly to clear the balance. In addition, BTL or commercial term finance needs a 5yr rate to make leverage work – where ICR doesn’t apply on Fusion.
“Fusion provides an answer here, with certainty of up to 24 months, tracking a reducing BBR, and an optional 12-month extension. It sits between bridge and BTL term, even incorporating ‘pay later’ deferred interest to reduce monthly payments.”
This focus on longer timeframes may prove especially useful over the coming months in the commercial market. A reckoning may be on its way and investors will need flexible solutions to ride out the uncertainty.
“Within the next year or so, around £71bn of commercial property debt will need to be refinanced. But, currently, many large banks are struggling with their risk appetites, LTVs, and capital requirements. Where will investors turn?
“Well, we may be able to help. Our Bridge Fusion loans can allow these borrowers to get their long-term financial affairs in order, and have the backstop of a 12-month extension while mainstream lenders regain their confidence.
“These loans are also primed for those investing in commercial property for the first time – which is appealing with residential investment uncertainty. Even now, Britain, and especially London, attracts commercial investment from foreign nationals. But investors with overseas ties are likely to face an even tougher time with our banks at the moment.
“That won’t be an issue here though. Fusion will be there for foreign nationals looking to expand in the UK market for the first time, build a presence and history, with funding available for large scale renovation projects, first-time commercial landlords, and professional portfolio owners looking for large loans of £3m to £20m”
Those longing for the flexibility of a bespoke loan, while keeping an eye on long-term trends in the wider economy, may find what they need with Bridge Fusion finance.
