The Watford-based provider has reported a rising number of enquiries from individuals whose funding needs are not being supported by mainstream lenders, with many of those individuals saying they have been granted credit in the past.

According to Cheval, recent months have seen an influx in deals which make “perfect sense – with sensible LTVs, suitable security properties and plausible exit strategies.” However, credit has been refused as the banks ask either for the applicant’s current loans to be repaid first, or according to Cheval, because they have no appetite to lend at in the current market.

Gavin Diamond, head of finance at Cheval, said: “The mainstream market has a much reduced appetite for deals that, in the past, would have attracted their interest. They are not willing to take a step back and look to gain an in depth understanding of each deal.

“Now, more than ever, if a deal doesn’t tick all the boxes, they are not prepared to lend – end of story – despite the fact that it makes sense on many levels.”

A recent example involved an individual in the process of building her dream home on land she had owned for 50 years. When an accident put building work on hold, the mainstream lender employed, at the borrower’s cost, a project manager who subsequently applied for a change to the planning permission.

The borrower had wanted to complete the build to her original design, but the lender was only willing to proceed if the build was done to the amended planning permission – failing which it would demand immediate repayment of the loan.

Cheval explained: “As the borrower had no means of repaying the loan at that stage, the property would have been put on the market for sale in its unfinished state.

“Cheval’s in-house surveyor met with the borrower, her builder and architect to gain a thorough understanding of the remaining works and the time expected to complete them. As a result, Cheval was able to provide the individual with a bridging loan to repay her existing lender and complete her dream.”

Mr Diamond added that such cases illustrated the effectiveness of bridging in the current environment.