Bridging Loans for Limited Company: All You Need to Know
What can you use bridging loans for limited companies use for?
Bridging loans for limited company businesses can be used for multiple purposes. Specifically, companies can use them for property investments, such as purchasing residential flats, or to advance a business plan. Additionally, where companies want to expand, they’ll often need new or upgraded premises to do so – we could provide funds for this purpose also.
Along with that, retailers may need more space for manufacturing. Marketing agencies could use upgraded offices to attract talent. In short, bridging loans could help ltd companies move forward with these projects at speed.
How much can the limited company borrow?
Our limited company bridging loans are spread across our product range with a maximum loan-to-value ration of 75%. Our largest residential loans can be used by Ltd companies, and they can stretch to £50,000,000. Furthermore, semi-commercial loans, which are used where residential and retail spaces intermix, as well as commercial loans can reach £15,000,000.
However, if you’re coming to us for 2nd charge funding, the largest loan size available is £5,000,000 with a max. LTV of 70%, regardless of property type.
Can I make my own calculations?
Yes, we provide a free-to-use bridging loan calculator which allows you to factor in interest charges and other costs. More importantly, our calculator will let you work out how much you can borrow, what you’ll need to pay back, and if we’ll be able to provide you with the finance you need.
Indeed, our calculator is easy to use, requiring just a few details on property values, the amount needed, and length of the loan. Moreover, you’ll be able to factor in your interest repayment preferences. You need to remember though, the figures provided will be an estimation. In order to get exact costings, you’ll need to discuss your requirements with us.
Do limited company bridging loans have higher rates? What kind of fees apply?
Across our bridging products, for individuals and businesses alike, we have no admin fees. Commitment fees are also refunded on draw-down. There is an arrangement fee of 1%, and there may also be an exit fee, with the price determined on application.
Our rates are assessed on a case-by-case basis, being affected by your circumstances, along with the wider economy. A limited company will not necessarily face a higher rate than an individual would as a result of its setup. Generally, the more complicated or challenging your wider background circumstances – as a limited company or individual, or the higher the Loan-to-Value involved – the higher the rate may be. However, your assigned underwriter will break all the relevant rates and fees down from the beginning, and make sure you’re happy to progress.
Why are bridging loans for limited company ventures unregulated?
A limited company bridging loan is unregulated if it’s secured against a property which you have not, and will not live in. The loan can only be used for a property which will be sold on, rented out, or otherwise used for an investment strategy.
Generally, a bridging loan is used for a transactional purchase, which makes them popular among intermediaries, property investors, and developers. Regulated loans are more consumer focused – such as residential mortgages.
Unregulated bridging loans can often be issued more quickly and flexibly than their regulated counterparts. Whilst there may not be regulation involved, at MFS we are stringent with our processes and hold ourselves to a high standard by being a part of organisations such as the NACFB, FIBA and IMLA.
Advantages of bridging loans for limited companies
There are many benefits in using a bridging loan for your ltd company. Our fast and flexible short-term funding can support your goals where mainstream lenders may be slow to react. Particularly, our adaptability can support you through good times and bad.
If you’ve found an opportunity which won’t stick around for long, our bridging loans could allow you to jump on it. On the other hand, if an unexpected cost is delaying your plans, our funding could cover what’s due while you focus on the long-term.
Does the limited company need to fulfil any particular criteria for this loan?
Bridging loans for limited company enterprises require the exact same details that our loans for individuals do, as well as a few extras on the owners and shareholders of the company. They are also assessed in the same way. The underlying owner(s) of the limited company need to be aged between 21 and 85, while the assets they’re investing in need to be in England or Wales.
Aside from those underlying essentials, we’re open to applications from a broad range of backgrounds and circumstances. Moreover, we can work with foreign nationals and those with complicated structures. Your claim will be handled by a dedicated underwriter who will clearly break down what’s needed to get the ball rolling.
The main requirements will typically include your personal details, information on the investment, and your exit strategy. As all our products are bespoke, they’ll adapt to your circumstances, and we’ll look for solutions to fit your criteria.
How do I repay my limited company bridging loan?
An exit strategy will be needed to repay your limited company bridging loan. Typically, this will involve refinancing with a long-term financial product, or selling an asset on to cover what’s owed.
We also have a range of payment options available for covering the interest. You can engage with fully retained payments, part retained and serviced monthly, or serviced monthly plans. Your underwriter will define the options so that you can choose the most appropriate solution for your limited company.
Why do you need an exit strategy for limited company bridging loans?
An exit strategy is needed to secure our bridging loans for limited companies. It’s the plan put in place to cover the loan’s repayments and redemption. Bridging loans are short-term finance products, usually issued for terms lasting just a few months to 24 months. Given this timeframe, you’ll need to have clear plans for switching to long-term financial solutions.
For companies, this could involve securing long-term finance with another lender, or utilising sale revenues to pay what’s owed. When covering the interest payments, you’ll be able to do so through a monthly service setup, fully retained, or a combination of these options.
What does the limited company need to secure the bridging loan?
Bridging loans for limited company businesses will be secured against an existing property, or a property being purchased. This can include commercial premises, such as offices, shops, and restaurants. In addition, you can also use residential assets for the security. This could include houses or buy-to-let flats held within your portfolio.
How long does it take for a limited company to get a bridging loan?
All our bridging loans, for individuals and limited companies alike, can be issued in as little as 3 days. Typically though, you should expect funding to come through in around 2 weeks. How quickly you’ll receive funds will largely be dependant on how quickly you and your solicitors can progress. Though, we aim to work to your timelines.
If everything is accounted for, with documentation and paperwork at the ready, you’ll likely receive your funds promptly. Our bridging loans for your limited company will have a dedicated underwriter, who will work to progress your case as quickly as possible.
Why work with MFS
We have been lending for over 16 years and in that time, we have learned to adapt to the complexities of corporate borrowers. We know the challenges your limited company is likely facing in the current market, and we understand what’s needed to overcome them.
Also, we’re able to lend to a range of business setups, including LLPs, SPVs, and the self-employed. There’s no complication we won’t at least try to find a solution for.
Our limited company bridging loans can be issued in as little as 3 days where everything lines up, regardless of how unique the investment is. We’ll be there for you from day one, and we will do everything we can to take your business to the next level.