Second Charge Capital Raising for a Substantial Development Project

Taking a 2nd charge for a renovation project

Loan Amount:
£168,000

Property Value:
£1,025,000

LTV:
70%

Experienced property developers can bring with them challenges that are different of those presented by newbie investors. Whereas a first-time landlord may face setbacks as a result of their lack of experience, a seasoned pro may prove more difficult to support due to the complicated nature of their investment.

One such borrower turned to us for support with their second charge plans. They aimed to raise funds against existing assets they owned to go towards the development of a new project.

While the strategy itself was sound, the exit was dependent on different construction and sales phases coming together in harmony. There was a delicate balance involved, and so our underwriter had to ensure everything came together very precisely.

Combing through the details

To start with, our underwriter combed through the paperwork, including the sales revenue forecasts, to ensure their obligations could be covered throughout the project. For added security, we confirmed that the borrower received sufficient rental income from their assets to cover our facility in the event of any delay to the completion of the phases.

We also factored in the project’s merits. It was situated in a prime location with plenty of local amenities, and transport links. We saw that the borrower would have strong demand from occupiers of all types, including buyers and renters.

This, coupled with the fact that the borrower had plenty of experience behind them with this kind of project, allowed us to deliver the funding required.

Tailored products for the market’s complexities

Efforts are being made to get development projects underway across the UK[1], creating opportunities for a broad spectrum of property investors and buyers. To truly take advantage of these opportunities however, investors will likely need bespoke finance behind them that is ready for the market’s complexities.

We can support these opportunities with many different products, from our “standard” residential loans, through to our more niche options that include second charge and fusion finance.

FAQs

Can I get a second charge loan if I already have a mortgage?

Yes, we regularly offer second charge lending to clients with an existing mortgage. In our recent case, the funding was used to refinance an existing facility and support business expansion. We will collaborate with your first-charge lender to ensure smooth loan structuring and repayment coordination.

How does second charge borrowing support business or investment goals?

Second charge loans allow you to release equity without disturbing your primary mortgage terms. This extra capital can be used flexibly, eg. to invest in or expand your business, or acquire additional properties, while keeping your existing mortgage intact. It’s a streamlined way to access funds while preserving your current lending arrangement.

What makes your second charge product different from other lenders?

Our second charge bridging loans are tailored and fast. We combine internal decision-making with in-house funding to deliver swift approvals and fund release. We also assess each case on its merits, including asset value, exit strategy, and borrower background, rather than relying solely on tick-box criteria.

How do you ensure repayments work alongside my first mortgage?

We structure the second charge loan so its repayment schedule complements your existing mortgage. Our team will review both lenders’ terms and craft a repayment plan that ensures affordability and avoids conflicts between lenders. That integrated approach helps protect your financial stability.