Project Finance

MFE Capital

do you need funding for your property project?

We are a principal lender - not a broker

We have a large pool of capital available for suitable property projects in the UK. Here's just a few examples of the types of projects we can help with;

Purchasing or re-financing UK properties

If your project meets our criteria we can have funding in place in as little as 48 hours. This includes properties on general sale, distressed properties and auction properties.

Staged funding options during the construction/renovation process

You always have the option to receive funding in stages, subject to certain milestones being met. This means you will have the funding available to ensure no lost time on site. This option is particularly popular for use in smaller developments and refurbishments.

Funding to purchase development sites

Funding available for purchasing sites with a strong possibility of gaining full planning permission. In some cases we will fund the purchase of the land and then 'flip' the land over to a developer for their land bank.

If your property purchase is time-critical, we can help

We know how important it is to be able to reach a decision quickly and with certainty. While we can't guarantee that we will provide finance to 100% of our applicants, we do guarantee that you will receive an outline decision (in principle) within 48 hours of receiving your project details. If we do reject your application we will normally provide a valid reason, along with tips and advice for making your next finance application more likely to receive funding.

We lend to companies, individuals and groups

As long as your project meets our criteria, it doesn't matter if you are applying under a corporate format or as an individual. We have lent to individuals, couples, families, limited companies, public companies and partnerships.

What happens next? How do I apply for funding?

In the first instance please send an email to: office@mfecapital.co.uk

We will reply back with our questionnaire for you to complete (MS Word format). Try to provide as much detail as possible, and always remember to include a phone number for us to arrange a chat.

WHAT IS BRIDGING FINANCE?

A fast, short-term funding option

Bridging finance is designed to fund development, construction and renovation projects. It can be used to fund both the land purchase and building costs for ground-up developments, or to provide a source of funding for smaller renovation or conversion projects.

Bridging finance can be an excellent option if you are a property (real estate) developer looking to refurbish a property to then sell off at a higher price, needing fast access to funding. This is because bridging finance can be accessible in as little as 72 hours, compared to a commercial mortgage which can take months.

Bridging loans are very flexible and can be tailored to the specific needs of the individual or company. They can be used to fund the purchase or refurbishment of most types of property. It’s quite common for a commercial enterprise to use bridging finance buy a new property before another development sells.

What are the reasons for using a Bridging Loan?

1. For purchasing a new property, including buying a property at auction, where a traditional mortgage lender could not issue funds in time to cover the purchase.

This includes buying a property that wouldn’t be covered by a traditional mortgage from a high street bank or to handle issues of poor credit. (It’s also possible for a combination of these factors to be the reason to use a bridging loan.)

2. To refurbish, renovate or redevelop a property

Sometimes a property may need significant renovations or redevelopment in order to make it generate a return at sale or as a rental.

Often, the condition of these properties will not meet the requirements of a buy-to-let mortgage, or funds are needed quickly to start the work.

In this case, a bridging loan is used to provide the capital to complete the renovations and then exit or pay off the loan by moving to a buy-to-let mortgage or selling the property.

3. For short-term refinancing

An example of this would be a landlord who has a maturing commercial mortgage but cannot renew their deal due to the supporting tenancies of the property coming to an end.

The landlord doesn’t want to rush the negotiations, so a bridging loan can buy time to complete the new tenancy contracts; and also exit the bridging loan returning back to a standard commercial mortgage.

4. To pay off a development lender

A property developer may have hit a snag and is running out of time before their property development finance ends. This type of bridging loan (called ‘finish and exit’) funds the completion of the development, enabling the developer to exit to a buy-to-let mortgage or sale of the property.

5. To prevent a repossession

If a property is due to be repossessed by a lender, a bridging loan could be used to pay off any debts secured against it, provided you have enough equity in this property, or another, for the loan to be secured against. This will enable you to regain control of the property and sell it on your own terms to repay the loan, and avoid a forced sale situation where the property may not achieve its full value.

6. Buying a property at auction

Bridging loans are ideal for purchasing properties through an auction. Once a successful bid is made at an auction, the buyer has 28 days to complete the purchase. Obtaining a mortgage within that timescale may be difficult or even impossible.

As bridging finance can be arranged very quickly, (as little as 72 hours in some circumstances) the loan can be used to purchase the property outright (sometimes with no deposit if you have other properties which can be used as additional security). The most common method of repayment in these circumstances is through re-financing - - when you have arranged a mortgage, the money is used to repay the bridging lender. Bridging finance can also be used if your plan is to purchase the property to renovate and sell for a profit.

7. Renovate your home before selling

If you are planning to sell your home, but some renovations would significantly increase the value, bridging finance can be used to fund this. The bridging loan would be secured on the property and then repaid through the proceeds when the property is sold.