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New CBILS Backed Bridging Loan Facility

We are delighted to announce a new bridging loan facility where the Government will pay the full monthly interest charges!

This is basically an interest free bridging loan

In addition at 75% LTV, it is the highest loan to value currently available in the bridging market!

  • Loans from £100,000 to £2.5 million
  • Loan to Value 75% (less 2% set up fees)
  • No Interest added to the loan facility as this paid by Government
  • Loan term up to 12 months
  • Available in England, Scotland and Wales

This facility has been set up to help property developers and investors who have existing development finance, bridging loans and other borrowings secured on residential investment property.

So, if you have a company that owns one or more new builds or investment properties that have borrowings secured against them, then this scheme could make you a huge saving on your interest payments. 

UK Government will pay 100% of the interest charged for the full 12 months term!

Lending Criteria

Please read through the lending criteria below to see if you qualify:

  • The minimum loan amount is £100,000 and the maximum is £2.5 million
  • A single client can take out multiple CBILS backed bridging loans, subject to a maximum £5 million of lending across their group structure.
  • Funds can only be used to repay existing loans and mortgages, such as development and bridging finance facilities.
  • An additional 15% of the loan amount can be raised to help finish off a development project, provided this is not for structural work, more for finishing off, fixtures and fitting, etc.
  • Capital raising for business purposes is possible provided the funds are to be used for other related business costs such as marketing and paying professional fees.
  • Loans are only available for residential projects, so can only be secured on houses or flats. They cannot be secured on commercial or semi-commercial properties.
  • This plan is only available to Limited Companies, where the business was set up before December 2019 and is not in financial difficulty.
  • However, property can be transferred from personal names into a Limited Company (a company set up before December 2019) to help fit the lending criteria.
  • Additional security can be used on a first or second charge basis, but this must still be on residential and not commercial property. Personal residences of the borrower cannot be used.
  • Unfortunately you cannot have a CBILS bridging loan and a Bounce Back loan simultaneously. However, it is possible if you repay or even refinance the Bounce Back loan with the CBILS bridging loan.
  • All loan applications must have completed by the 1st October 2020.

What are the costs?

There are minimal costs involved:

  • For loans from £100,000 to £250,000 there are arrangement costs of 2.5% of the loan advance. The CBILS scheme pays 0.5% and the remaining 2% can be added to the loan facility.
    No Personal Guarantees are required for loans up to £250,000.
  • For loans from £250,001 to £2.5 million, the arrangement fees are reduced to 2% of the loan advance. The CBILS scheme pays 0.5% and the remaining 1.5% can be added to the loan facility. Personal guarantees for 20% of the loan amount are required on loans over £250,000. 
  • You will need to pay any valuation fees and legal costs, we are unable to add these to the loan facility.
  • Loans are set up for 12 months, with a 3 months minimum term. If the loan is cleared within 3 months then there is an early redemption charge of 2% of the loan advance.
  • The CBILS scheme pays 12 months interest. If the loan is not repaid within these 12 months, extensions will be considered subject to the lenders normal terms. The borrower will then be required to pay the monthly interest charges.
  • Monthly interest rates range from 0.75% to 1.1% per month - but this has no impact on the borrower as is paid by the Government.

Summary

Criteria

  • New build houses or flats that are completed or nearly completed
  • Have outstanding borrowing secured against them
  • Are owned by a company (or can be owned by an existing company set up before December 2019)
  • Located in England, Scotland or Wales

You get

  • Loan from £100,000 to £2.5 million
  • 1.5% to 2% set up cost that can be added to loan
  • 3 months minimum term or 2% ERC
  • No interest for 12 months