A Guide to Commercial Alternative Finance

Born in the United States of America, the alternative finance revolution has landed on our shores in the last couple of years and raising finance for the SME will never quite be the same again.  It is forecast that by the end of 2015, the altfi market place will have issued new loans of well in excess of £4 billion.

Gone are the days of going cap in hand to the business banker clutching armfuls of finger in the air financial projections produced, at cost, by your accountant.  Gone also are the days of waiting interminable amounts of time jumping through endless banking hoops whilst our “local” banker presents funding cases to far flung decision makers.  Gone are the days of being forced to proffer more and more personal security to support the funding requests of a growing company.

With the SME denied the help of traditional banks, largely due to the outcome of the 2008 crash and the impact of the Basle Accords on bank liquidity ratios, but with demand for vital sources of working capital still there, the number of alternative finance providers ready to plug funding gaps has grown apace.

Businesses come in all shapes, sizes and hues and, as a consequence, every business has its own unique funding requirements.  Alternative finance providers have emerged to focus on specific segments within the SME funding mix.  This is great news for the SME exploring its funding options, but the myriad of potential solutions does create its own challenges and the plethora of new players delivering multiple options can make it somewhat overwhelming for the uninitiated to tread a well planned path through the maze of new finance providers.

In an unstable economic climate banks are less likely to lend – especially to risky business investments. In today’s unpredictable financial market, it is becoming more and more difficult to get approved for a bank loan, which is why the trend for alternative finance solutions keeps on growing. Without these alternative funding options, many businesses would have ceased trading or would-be successful property investors wouldn’t have been able to buy a second property. Read more

How a Bridging Loan can Help your Finances

A bridging loan, sometimes known as bridging finance, is a viable short term lending option for many businesses. It’s called a bridging loan for a reason – it acts as a financial bridge, helping you along to your next destination. It gets you from A to B, until you have money coming in to clear the loan.

Many companies opt for a commercial bridging loan because they can be arranged in a very short amount of time compared to other types of finance. They are also available up to very large amounts – up to £20 million from private and flexible lenders. Short term bridging loans are available to individuals or businesses, but are generally used for the same purpose. Read more

Should you Take Advantage of Falling House Prices?

The nation’s housing market has been volatile over the last couple of years, mainly due to political influences such as Brexit. The UK’s uncertain economic climate has had a huge impact on the housing market, and the change in stamp duty for buy-to-let properties and second homes has also weakened demand for properties.

The slowdown in growth is usually seen as a negative thing, as homeowners will lose out when selling. However, a fall in house prices can create an interesting prospect for the entrepreneurial opportunist. If buyers move fast, they can take advantage of low house prices before they are predicted to start rising again.

Halifax, Britain’s largest lender, released its figures for June showing property prices were falling fast. UK prices fell 1% in June, which is the largest drop since January. It is the third month in a row in which figures have fallen, and that hasn’t happened since 2012. According to Halifax, growth in house prices is now down to 2.6% in June – the lowest increase in four years.

The evident slowdown is particularly evident in London, where house prices are inflated compared to the rest of the UK. In fact, over a third of properties on the market in July slashed their asking prices according to research from HouseSimple. So is now the time to invest in a property or two?

Falling House Prices: An Opportunity?

First time buyers are happy at this news as it means they might actually be able to get onto the property ladder at last. However, commercial buyers and investors could also capitalise on falling house prices. A reduction in prices means buyers get better value for money, however more owners may hold onto their property for longer to see if they will be able to get a higher price in the future.

A fall in property prices can be a perfect business opportunity – but you’ll have to act fast. You never know which way the market will swing, so you could end up paying thousands more even by pushing back your search a month or so. If you find the ideal property at an ideal price, be sure to secure funding from a lender who will pay out in good time. If a mortgage application takes too long or is refused, then the seller will look elsewhere. If you want a quick transaction then sometimes it’s acceptable to apply for bridging finance instead, which is paid out at short notice. Once the short term loan needs to be paid off, you can convert it into a mortgage if needed.

Do you want to see what property opportunities are waiting for you? Speak to us today about commercial mortgages and bridging finance.