Exclusive: Bridging lender to launch offering 90% LTV

Exclusive: Bridging lender to launch offering 90% LTV



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Since identifying a huge demand for bridging finance outside the heavily funded M25 and inner Manchester city areas, commercial brokerage, Federal Finance, has today announced that it will be diversifying to offer £40 million of principal funds for bridging loans. 

The fund is due to go live in two to three weeks’ time and will be distributed through an open panel of brokers throughout the UK. 

Federal Bridging Bank, the arm of Federal Finance which will provide the bridging products, will offer 80 – 90 per cent LTV nationwide and 100 per cent LTV for purchases with additional security. Funds can be lent on commercial property, as well as those for mixed use, and second charges will also be offered.

Funding, which currently stands at around £40 million, will be sourced primarily from UK-based investors and hedge funds, although lines have also been secured from overseas investors. The fund will be aimed at a diverse range of individuals, from first-time investors at auction to experienced professionals with an existing portfolio. 

An external Credit Manager will be in place to sign off all the deals that Federal Bridging Bank complete, to ensure that the investors’ interests are protected in each deal and the funding is placed within safe investments to secure high returns. 

Heading up the division will be Tan Bahia, Director at Federal Finance, who has previously worked as Corporate Manager at Barclays Bank, Director at HSBC and has a long-standing history as a commercial financial adviser. 

A five-man team has been employed to deal with the new bridging enquiries, which Tan hopes will expand as this arm of the business grows.  

Commenting on the expansion into bridging finance, Tan told us: “Our knowledge as a master broker in the commercial sector has enabled us to identify a considerable demand for bridging in areas that are reluctantly funded by most other lenders. This expertise will also enable us to refer deals to lenders which we cannot do ourselves.” 

“As brokers, we have received a high level of enquiries from those looking to obtain financing for projects outside the prime M25 region - there are great opportunities for those willing to lend on these projects which require high LTVs - but most lenders at the moment appears to be playing a very cautious game.” 

When asked about his projections for the year, Tan said: “By the end of the year we are aiming to write upwards of £25 million of bridging loans.”

Federal Finance will also be launching a development fund for the midlands towards the end of the year worth £80 million, aimed at injecting liquidity into areas of the country which are lacking the funds to get the property market kick-started. 

 

 

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