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Second Charge Mortgages & Bridging Loans

Did the computer or lender say ‘NO!’?

21 May 2020

Chris O'Shea | Applying for Finance

Second Charge Mortgages and Bridging Loans

Sometimes you need to raise finance

No matter how good your cash flow management is or how careful you are with your finances, sometimes your business needs an injection of cash. There are an almost endless list of reasons why a business may need to raise funds – sometimes these reasons are completely unexpected. 

Your business may have an expensive debt payment looming. Perhaps a problem has occurred with a supplier or your inventory or you wish to start a new growth or development project. 

Sometimes the computer says ‘no’

Sometimes, it doesn’t matter how good your reason is for needing to raise finance – sometimes the bank (or their policies) just say ‘no’.

It is important to remember that this is not always down to the fact that your business is unable to afford the loan repayments (referred to as the debt servicing costs.) In many cases, your business is more than able to repay the loan. 

The problem isn’t your business’s finances. The problem is your business’s request. 

It is more common than you may expect that the request simply does not fit into the lenders’ credit policy. 

Here are some popular options if your business has been rejected for a loan through the regular channels:

avoiding fraud during COVID-19

Alternative Finance

It is essential to take care when seeking alternative means of finance. Although many forms of alternative finance can be hugely beneficial for your business, sometimes they can be costly, expensive to get out of and time-limited. 

Second Charge Mortgages

The second charge mortgage is becoming increasingly popular with businesses. If the reasons for a loan are business-related, it is not possible to borrow against the equity of your house from a residential mortgage provider. Therefore, a commercial second mortgage must be sought. 

The terms and conditions vary from lender to lender but it is possible to borrow in this way. 

Options available: 

Term Loans 2-20 years

Capital and interest loans

Interest only loan

Bridging Loans

If your business’s financial needs are expected to last in the short-term, it is also possible to raise the finance via a bridging loan. Bridging loans are a form of short-term finance, with loan terms generally lasting up to 18 months and interest charged monthly. 

Although they can be more expensive than a second mortgage, bridging loans can be extremely useful for businesses looking to ‘bridge’ a short-term gap in their cash flow. 

If you want to discuss either of these types of loans please contact Nigel Crossman on 07715668267 or email him on nigel.crossman@samera.co.uk.

See how much you can raise

Use our Loan Calculator to see how much you can raise with us for Second Charge Mortgages & Bridging Loans .

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