Top-up finance puts lender in (asset) class of its own

Top-up finance puts lender in (asset) class of its own



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For some clients, whilst a bridging loan can provide the majority of finance required, the property used as security is not quite equity-rich enough to enable them to secure the entire amount of funding they are looking for via a bridge.

In this situation, the customer needs an alternative method of top-up finance, something which the UK’s leading short-term asset finance lender borro is ideally positioned to provide.

Indeed, borro today announced a 661 per cent increase in property-related loan applications from customers, with one in seven enquiries to the business now related to a property issue. Furthermore, the company anticipates a 40 per cent rise in property business over the next year.

Analysis of these figures reveal that one of the three main reasons clients need to utilise borro's services is for bridging purposes (the other reasons include funding property development and redecoration and covering the costs of owning a rental/second property while unoccupied/before sale).

Paul Brett, Business Development Director of borro, explained how the company’s services can be used to provide top-up funding for a client who has already secured the majority of the finance they need through a bridging loan. “Apart from our ongoing marketing work with intermediaries, we have also forged relationships with bridging lenders, who recognise the advantage of having a source to help them complete a deal which would otherwise not complete.”

He added: “One of the great advantages of having borro as a resource is that we are not limited by conventional LTVs because we are lending against a different asset class. We are able to make up any shortfall caused by restrictions on LTV or valuation.”

In terms of the assets usually secured against for top-up finance, items include fine art, antiques, watches, classic cars and jewellery. Paul said, “As far as the size of loans in this area, it varies. The majority is around the £20,000 mark but we have lent £1 million as a top up!

“The relationships we have forged with bridging lenders mean that they do recommend that their introducers contact borro in the event of a shortfall, and then it is up to the client. Everyone we have dealt with has been very pleased with the service they received.”

Paul emphasised the flexible nature of the asset lender’s approach: “What we provide is a simple and effective solution to those cases where the bridging lender, for whatever reason, is unable to advance the full amount required by the client.

“This can come up because of unforeseen difficulties such as down valuation or because of credit issues, for example. Our lending is non-status and our security is totally separate from the property, so we are able to fill the funding gap very effectively and in a timeframe that even the bridging companies would struggle to match.”

Indeed, speed of completion is something the asset lender prides itself on as, once the personal item has been valued, the client will have cleared funds in their account within 24 hours; so, if the need for top-up emerges suddenly, the chances of borro being able to provide the necessary finance quickly looks pretty positive.

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