Why bridging loans are ideally placed to support refurbishment projects

Bridging loans have become an increasingly popular source of alternative finance for those in need of fast and efficient access of capital. Offering brokers and borrowers access to loans that are tailored to their needs, the bridging loan market is currently worth in excess of £4 billion, according to the Association for Short Term Lenders.

At Market Financial Solutions, we regularly issue bridging loans for clients to successfully complete on a property acquisition. However, we are also experts when it comes to arranging finance for light refurbishment projects. The fast turnaround nature of these projects makes bridging loans ideally placed to support investors seeking to renovate one or more of their existing properties. What’s more, they enable property investors to leverage existing real estate assets to secure funds so they can bring another property up to standard ahead of a letting or sale.

Market Financial Solutions regularly supports clients in need of funds for renovation projects – our recent case study explains how.

 Bridging loan released for light refurbishment on an investment property

An existing broker introduced a client who was in need of funds to complete works on an investment property, which were taking much longer than originally intended. While the majority of the planned refurbishments has been completed, the client required a loan to finish off the work and also fund a separate refurbishment project for another one of their investment properties.

With two properties involved in the case, speed was of the essence. A valuation of the property being offered as security was ordered at MFS’ request immediately following the enquiry, with a report following 48 hours later. We assessed the market value of the asset being used as security to be £1,500,000 and agreed to issue a £500,000 at a 33% LTV; a sum that covered the costs of both their current and future refurbishment projects. Assessing the needs of the client, we agreed that an exit strategy would be facilitated through long-term financing once the works had been completed.

To find out how MFS can deliver a tailored loan solution specific to the needs of you or your clients, speak to a member of the MFS team today on +44 (0)20 7060 1234, or email info@mfsuk.com

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