Our underwriters show flexibility with our cases on a daily basis. Challenges constantly present themselves, but our amazing teams keep on finding solutions to them. But what does this look like in practice?
We regularly espouse how our underwriters go above and beyond. It takes a lot of work and tenacity to have funding delivered in as little as 3 days. But given all this hard work, we felt only our underwriters themselves could fully detail what goes into what they do.
As such, we sat down with many of our busiest underwriters to break down exactly what it is they’re capable of. We spoke to them all at length, discovering the common issues that present themselves in the current market, and the tools they use to overcome them.
Two end-goals
First up was Sonal Kavri. In recent weeks, Sonal has seen many investors seek bridging finance for both a residential purchase, and light refurbishment. This is a common scenario. But it can be challenging addressing two end-goals on a single loan.
She explained: “A borrower may find a property they want to buy at auction. But often these kinds of properties need a bit of modernisation.
“Some are so run down they need a complete renovation. Obviously, sometimes this is easier said than done.”
This can be made even more difficult when borrowers end up pushing towards their financial limits. Say an investor needs the maximum LTV available to make the auction purchase (75%), but still requires more funds for the refurbishment works.
Sonal detailed how she may resolve this and find a way forward.
“We could lend 75% gross of the purchase price, and take a 2nd charge against one of the borrower’s other properties at 70% LTV,” she said.
“This would allow the borrower to secure their purchase quickly – which is important when it comes to auctions! – while leveraging another property to raise the funds needed to improve the condition of their new asset.
“This will put them on the path to generating a high rent from their new asset. Also, when all the works are finished, we’ll have set them up nicely to look at their long-term refinancing options. This could involve an outside lender, or we may even be able to put them on our BTL mortgage product.”
From auction loans to business plans
Roger Taylor, another one of our underwriters, shared how he may be able to help borrowers with funding that won’t even be used for a property investment.
“In the current economy, we’ve seen businesses and entrepreneurs across industries struggle to stay afloat,” he said.
“This doesn’t mean they’re failing per se; they often just need a bit of support to push past temporary difficulties. It’s here where we can help.”
Often, borrowers turn to us to raise capital for their businesses’ cashflow. Roger explained how we may go about facilitating this.
“A borrower may have equity in their main residence, so we can use this to secure the loan,” he said.
“We could raise a loan at 70% LTV on a second charge basis on this property. We’re happy to raise capital for business purposes rather than a property, so long as the case makes sense.
“To support this kind of deal, we’d need to see a solid business plan. We’d ensure the client’s plans made sense, held potential, and could demonstrate long-term vision.
“We’d also focus on the exit strategy. Which, in this case, could be forecasted profits from the business itself. We understand that immediate negative sentiment in the wider economy can take its toll. But, for the long-term, we focus on making sure a borrower’s circumstances pave the way for a prosperous investment, and subsequent exit, strategy.”
Indeed. As our underwriters allude to, we will remain committed to providing funding wherever possible. Even in the current market, we look for reasons to lend.
If we’re slowed down by temporary roadblocks, we won’t simply give up. We will think outside the box to support brokers, and their clients.
Hopefully, Roger and Sonal have given brokers food for thought on how we can help them overcome their client’s challenges. If anyone wants to find out more about the tools at our disposal, we’re only a phone call away.
