Broker Guide: Securing Finance for Overseas Clients or Investors

Broker Guide: Securing Finance for Overseas Clients or Investors


As a result of the increased demand for bridging finance in the UK, the question of lending to overseas clients or investors who wish to invest in the UK has been cropping up recently amongst brokers. The perception when it comes to this type of lending, for many brokers, is that they either do not know who to approach when enquiring or may be unaware of the exact extent of finance available.

When we phoned industry experts to get to the bottom of this, we received somewhat mixed signals from bridging lenders in terms of enquiries generally a consequence of where the lender is based, with many more enquires being received in the South East and London.

Simon Allen, a Business Finance Specialist at Total Business Finance, believes that there is a “trend for lending to overseas clients who wish to invest in the UK but that it’s usually for property in London as a result of there being a lot of demand for property in the South East.”

We found that while the majority of lenders categorically don’t lend on overseas properties, some will do so if the legalities, checks and the exit are viable.  Indeed, a select few specialise in it.

Lenders we spoke to, such as Mark Posniak, Head of Marketing and Operations from Dragonfly and Gavin Diamond, the Finance Director at Cheval Bridging Finance, stated that: “Bridging lenders would release funds and have secured funding against a property or properties in England, Scotland and Wales to assist applicants with offshore purchases”, but when lending to an overseas investor wishing to invest in the UK, Gavin added that: “local lenders are not typically set up to be able to take security over foreign properties. It's a very specialist area.”

Securing Finance for Overseas Investors

So how does your standard dealing with an investor change when they are based overseas ? What criteria apply when checking on an application? What are the main barriers in lending to overseas investors? We asked experts within the bridging industry for their thoughts on the matter.


Terry Markham, Managing Director at The Funding Operation Ltd, told us that although this area is still relatively small in comparison to the rest of bridging: “We do have many enquiries from brokers for this and I would say that there is an increasing demand for it”.

Liz Syms, owner at the Connect Finance Group which specialises in sourcing finance for (foreign national and expat) property investors buying in the UK, said: “we have a massive demand from clients and brokers in the industry. In particular, we are seeing lots of Asian clients looking to purchase in the UK at present.”

Gavin Diamond stated: “Cheval doesn't receive a large number of enquiries for this, and we haven't done many deals of this type but we would lend if we could get comfort from a money laundering perspective as to the identity of the borrower and the source of the funds. All other requirements for a regular bridging loan would apply. Naturally, if the exit route was from funds from outside the UK, it would be more difficult to gain a satisfactory level of comfort.”

When asked how many sources the Connect Finance Group has, Liz Syms told us that they “have a range of lenders who are able to accommodate the needs of overseas non EU clients buying in the UK. Typically maximum LTVs are in the region of 70% . We do have some bridging lenders we work with, for example Dragonfly and Omni Capital, who will consider foreign nationals and expats for their bridge products.”

Barriers in Lending Overseas

In reference to whatthe main barriers in lending to overseas investors are, the responses unanimously focused on security issues and exits, but also licensing issues.

Terry Markham, supports this view by saying: “The main barriers are in carrying out credit checks and checking the validity of clients’ passports.”

Gavin Diamond added: “A bridging loan to a foreign borrower would be evaluated in a very similar way to any other bridging loan. However, when lending to foreigners, lenders would need to place a greater emphasis on "knowing their customer" as it is inherently more difficult to verify the identity of foreigners and satisfy anti-money laundering regulations.”

Liz Syms affirms this: “Many lenders do not have the ability/ systems in place to lend to clients based overseas, for example how they serve a non-EU national notice of repossession in the event of default. Some foreign legal systems can make this very difficult increasing lenders risk, particularly those without an international presence.

“Certain countries have licencing issues which means we have limited lenders who can lend to clients from that country. Australia is an example, although it is still possible with a couple of lenders.

“For self-employed applicants, some lenders will only accept proof of income from an international accountant. If accounts are done by a local accountant, having them countersigned by an internationally recognised accountant can be costly. The applications are always full-status and the underwriting processes can be lengthy and often complex.”

Liz Syms confirmed: “Lenders always request sight of original documents where possible, posted to us by recorded delivery. As an alternative, we accept documents certified by a member of the British Embassy.”

When considering lenders who don’t typically lend overseas, Terry Markham believes that: “Whether lenders will lend to overseas investors depends entirely on the type of month they have had. It is a bit of a gamble as the risks are high but if they’ve had a good month then they may take on more cases of it.”

Masthaven’s Sales and Marketing Director, Richard Deacon, said:”We do not lend overseas, we lend in mainland England and Wales only. We are happy to lend on England- and Wales-based property for the funding of overseas purchases, dependent on the exit route. We also have lent to overseas-based clients who hold a UK passport, and providing we are happy with the legal side of things we would go to typically 60% LTV. It is a similar story lending to non-UK citizens as well. The general rule of thumb is that as long as the story makes sense and you make doubly sure the legal side of things is strictly adhered to, generally the deals are good ones.”

Simon Ismail of Goldentree Financial Services, told us: “There is no problem lending to any nationality so long as they are prepared to come and meet with us at the security property which has to be in the UK.”


Here are the following pieces of advice the packagers and lenders we spoke to have given to brokers when securing funding for overseas clients’ or offshore purchases:

- Having a good relationship with the lenders is very important to build rapport, flexibility and an understanding of the underwriting criteria.
- Manage your clients’ expectation in respect of the volume of paperwork and information that the lender is likely to require and that timescales for processing may be very much longer than expected.
- If the broker is not experienced in this field, link with a partner who can assist them through the process and have already established strong lender relationships
- Always make sure that a fuller fact find is made
- All lenders have their own processes so check with the lender to see what brokers have to comply with. Ensure that all criteria needed by the lender for proof is attained.
- Make sure that the solicitors certify the identity and not the broker
- Make sure that the checks on passports are thorough.
- Make sure that all types of communication, both written and verbal, are on file, just in case something goes wrong
- When taking out any bridging loan it is important to have a viable exit route in place

What does the future hold?

Most lenders do secure funding on UK property to assist applicants with offshore purchases but have never ventured fully into dealing with overseas investors coming into the UK market.

The high levels of risk involved when lending to an overseas investor makes many lenders very cautious about including such practices into their business strategy. The criteria for lending are much less flexible with overseas investors. When dealing overseas, it complicates matters, not only in terms of analysing the stability of different housing market conditions but with the thorough identity and credit checks which need to be made to ensure that the application is possible. As long as there is a viable exit strategy in place, your chances of securing the participation of a bridging lender stand in better stead. Overseas bridging lending is a risky business but it may be a path that some lenders look to exploit. The demand for bridging continues to surge due to a lack of high street bank lending and if the demand for overseas investors interest in UK property increases then lenders may look to add another string to their bows in terms of business strategy and product offering.

Earlier this year, the Chancellor of the Exchequer, George Osborne announced in his “Britain is open for business” budget speech that corporation tax in the UK will be cut to 23% by 2014. Might this mean that there will be a bigger prospect to accommodate for overseas clients and investors wishing to commercially invest in the UK? Let’s see what the future holds…

By Jason McGee-Abe

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