Frequently asked questions
62 questions, answered straight.
These are the questions clients actually ask, with the answers we actually give — including the ones where it depends, and on what.
If yours is not here, call us or send it over.
6 questions
Working with a broker
Three things. We work out which facility fits the case and which lenders will genuinely consider it — which is a different question from which lenders advertise it. We package the submission the way that lender's credit team reads a case, so it is assessed on its merits rather than sent back for missing information. And we run the file from submission to drawdown, chasing the valuer and both solicitors.
What we are not is a rate comparison site. Almost every commercial case has something about it — the entity, the asset, the timescale, the exit — that a comparison table cannot price.
Our fee is agreed with you in writing at the point we present terms, and on the great majority of cases it is payable on completion — so it is paid out of a facility that has actually worked for you.
You will see it alongside the lender's arrangement fee, the valuation and a legal estimate for both sides, on one page, before you commit to anything. There is no charge for the first conversation and none for indicative terms.
No. We place across high street banks, challenger banks, specialist lenders and private funders, and we are paid the same whichever one writes the loan.
Where a case is better served by a specialist packager with a relationship we do not hold, we will say so and introduce you rather than push it through our own panel.
Not at the first conversation. We work from the figures you give us and from soft criteria checks with lenders, and neither leaves a footprint.
A hard search happens only when you have seen the terms, agreed them and told us to submit. If anyone runs a hard search on you before that point, ask why.
Yes — across England, Scotland, Wales and Northern Ireland. The office is in Covent Garden but almost none of the work depends on being in the room. Most cases run by phone, email and video, and the valuer goes to the property rather than to us.
Scotland is worth flagging early because the conveyancing process and security documentation differ, which affects the timescale rather than the availability of funding.
Often, yes, particularly on security-led lending where the asset and the exit carry more weight than the credit file. Bridging and development lenders price adverse rather than refusing it outright.
It changes the placement and usually the rate, and it makes the choice of lender more important, not less. Tell us at the first call rather than at valuation — a decline for something disclosed late costs you a valuation fee and three weeks.
As a rough working figure, one month of turnover, sometimes reaching two on a strong and consistent trading record. A business turning over £1.2m a year would be looking at £100,000 to £200,000 without security.
That is a starting point, not a rule. Consistency matters more than size — a business with steady monthly receipts will out-borrow a lumpier business on the same annual turnover.
It narrows the panel considerably but does not close it. Some lenders will consider from six months where the receipts are strong and the directors have relevant track record; a start-up loan scheme may be the better route below that.
Expect to be asked for a personal guarantee and to pay materially more. If there is an asset involved, asset finance is often available earlier than unsecured term debt.
A hard search will, and several in a short window will do real damage — it reads as someone shopping in difficulty. This is the single strongest argument for going through one broker rather than applying to four lenders directly.
We work from soft criteria checks until you have seen terms and told us to proceed. Only then does anyone search your file.
On rate, almost always — often by two thirds. On total cost, not necessarily: security means a valuation, both sets of legal fees and several more weeks, which can add thousands and lose you the opportunity you were borrowing for.
For a five-year facility the security is usually worth it. For nine months, frequently not.
For unsecured: identification, six to twelve months of business bank statements, and your last filed accounts. Many lenders take the statements through open banking, which takes minutes.
For secured: add current management accounts, an up-to-date profit forecast, details of the security property and existing charges over it, and a short statement of what the money is for.
Yes — refinance, sometimes called sale and leaseback. The lender buys the asset from you at an agreed value, pays you the cash, and you repay over a term while continuing to use it.
It is one of very few routes to working capital that does not touch property or your unsecured capacity. The asset needs to be owned outright, identifiable by serial number, and still have useful life.
More readily than most facilities, because the lender holds the asset. Historic CCJs, a previous insolvency or a thin credit file narrow the panel and raise the rate rather than closing the door.
What matters most is the asset. A recoverable hard asset with a clear resale market will find a lender in circumstances where nothing unsecured would.
You pay a nominal option-to-purchase fee, typically between £50 and £250, and title transfers to you. The asset is then yours outright.
If a balloon was built into the agreement, that falls due at the same point and must be paid, refinanced or covered by selling the asset.
Yes, and it is common. Lenders look at the age at the end of the agreement rather than the start — many will not have an asset older than ten or twelve years when the term finishes, which caps the term you can have on an older item.
Private-sale purchases are harder than dealer purchases, because the lender must verify title and condition. Not impossible, but expect an inspection.
Less than unsecured borrowing does. It is secured on a specific asset rather than against the general covenant, so it uses up less of the capacity a bank will look at.
It is still visible and still counted in affordability. A business carrying six asset agreements will have that total serviced cost taken off before any other lender assesses what is left.
Repayment. A loan takes a fixed sum on a fixed date whatever your trade did that month; an advance takes a percentage of what you actually took. In a bad week you repay less, and in a dead week you repay nothing.
The cost of that flexibility is significant. Where your income is predictable, a term loan will nearly always be cheaper.
Usually not. Most providers integrate with the major acquirers and take the holdback from the settlement without changing your terminal.
Some will offer a better rate if you switch to their own acquiring. Compare the total including the new processing rates, not just the factor.
Repayment slows automatically, which is the entire point of the structure. There is no arrears position simply because trade was poor.
If the drop is permanent rather than seasonal, talk to the provider early. Most will discuss a reduced holdback, and all of them prefer that to a business failing.
Not for a standard merchant cash advance, which is calculated from and repaid out of card settlement. A trades business paid by BACS has no card stream to lend against.
Revenue-based facilities that read your business bank account rather than a merchant account do exist and work similarly. Ask and we will point you at the right one.
We will put it side by side with the alternatives on one page — the total cost of each, against your own takings — so the comparison is in front of you rather than asserted.
Where your income is predictable and security is available, something cheaper usually is. Where takings move with the season and there is little to secure against, this structure earns its place, and we will arrange it properly and explain exactly how the holdback will feel week to week.
With factoring, yes — it is disclosed and the lender contacts them directly for payment. With confidential invoice discounting, no; they pay into an account in your business name and nothing identifies the lender.
In practice the stigma is largely historic. Invoice finance is standard in recruitment, haulage, manufacturing and construction, and most credit controllers have dealt with it many times.
Once the facility is running, usually within 24 hours of uploading the invoice, and same-day with many lenders.
Setting the facility up takes longer — one to three weeks — because the lender reviews your ledger, verifies a sample of invoices and takes a debenture.
Yes. Selective or spot factoring funds individual invoices with no obligation to put the rest of the ledger through and usually no long contract.
It costs more per invoice than a whole-turnover facility. For an occasional large invoice that is usually still the right trade.
On a recourse facility, after an agreed period — commonly 90 to 120 days past due — the advance on that invoice is recovered from your available funds. You carry the loss.
On non-recourse, an approved debtor's insolvency is covered up to the agreed limit. Disputes are almost always excluded, so a customer withholding payment over a quality issue is your problem either way.
Usually yes, but the debenture matters. The invoice financier will normally want a first charge over the book debts, so any existing lender with a debenture must agree to a deed of priority.
That is routine and we handle it, but it adds time. Flag any existing debenture at the first conversation.
It is difficult. Most lenders want twelve to twenty-four months of trading and evidence of completed cycles, because the facility is underwritten on the transaction working and you have not yet shown that it does.
Where the end customer is very strong and the order is confirmed, some specialist funders will look at it. Expect a personal guarantee and a lower funding level on the first few cycles.
An overdraft is a general limit against the business. Trade finance is drawn against a specific transaction, with the goods and the receivable as security, and is repaid when that transaction completes.
That means it can be larger than an overdraft the same business would get, because the lender is looking at the trade rather than only the balance sheet.
No. Export finance funds the gap when you ship to an overseas customer on credit terms, and domestic supply chain and purchase order finance work on the same principle without a border involved.
The common factor is a defined trade cycle with an identifiable buyer and seller, not international shipping.
They define exactly where responsibility and risk pass from seller to buyer — who pays for shipping, who insures the goods, and at what point the goods become yours.
That determines when the lender's security actually attaches and who bears the loss if a container goes over the side. Getting them wrong can leave you paying for goods you do not yet own and cannot claim on.
Often, yes. Duty, VAT and freight can usually be included in the funded amount, which matters because they fall due at the border, well before your customer pays.
Say so at the outset. A facility sized on the supplier invoice alone leaves you finding the duty and import VAT from working capital.
Very rarely, and it is the question most often asked. Lenders want the buyer to have real money at risk, typically 20% to 40% of the consideration.
The realistic route to a smaller contribution is a management buy-out with substantial vendor deferred consideration, where the seller effectively lends you part of the price because they know the business and trust the team. Even then, expect to put in what you can and to guarantee the debt.
For a buyer, an asset purchase is usually cleaner — you take the trade and the assets you want and leave historic liabilities behind. For a seller, a share sale is usually better for tax, so most negotiations start there.
It also affects the funding. An asset purchase can often be part-funded with asset finance and a commercial mortgage on the property, which can be cheaper than pure acquisition debt. This is a question for your accountant and solicitor, and it should be settled before heads of terms.
A test that the business generates enough free cash flow to cover its total debt payments by a margin — commonly 1.25 or 1.5 times, tested quarterly on a rolling twelve-month basis.
It is the covenant most likely to be breached first, because it responds immediately to a poor quarter. Negotiating where it is set and how it is calculated is worth more than shaving a quarter point off the rate.
Considerably. Freehold property in the target can be funded separately on a commercial mortgage at a much lower rate and a much longer term than acquisition debt, reducing the expensive senior debt needed.
Splitting the property out into a separate entity that leases back to the trading company is a common structure with real tax and succession advantages. It needs accountancy input at the planning stage, not afterwards.
Commonly 10% to 30%, over one to three years, and subordinated to the senior lender. Beyond that, sellers usually resist and lenders start asking why.
A seller willing to defer a meaningful share is one of the strongest signals a lender can see. A seller demanding every pound at completion invites the question of what they expect to happen next.
The lender is rarely the constraint. Valuation availability and the solicitor's title work are. On a clean registered title with searches in hand and a valuer who can attend that week, two weeks is realistic. On an unregistered title, a missing right of way, an absent freeholder or an unsatisfied charge, it is not.
We tell you which of those you are dealing with on the first call, because it changes what you should agree with the seller.
Usually — that is what retained or rolled interest means. The lender calculates the interest for the term and either deducts it at drawdown or adds it to the balance each month.
Both reduce what you receive on day one or increase what you repay at the end. If you can service the interest monthly from other income, the facility is cheaper. Worth modelling before you choose.
Yes — that is one of the standard uses. A property that cannot be mortgaged in its current condition can still be bridged, because the lender is underwriting the asset's value and your exit, not its habitability.
Expect the valuation to report on both a current and a post-works basis, and expect the works schedule and budget to form part of the submission.
Speak to us before the term expires, not after. Most lenders will consider an extension where the delay is evidenced and the exit still credible — a sale agreed but held in conveyancing, for example. Extensions usually carry a fee and sometimes a rate change.
Where an extension is not available, refinancing onto another bridge is more expensive but far cheaper than sitting on a default rate.
You will see every number before you commit: the lender's arrangement fee, the valuation, both sets of legal costs, any exit fee and our own fee, set out on one page against your expected redemption date.
Our fee is agreed with you in writing at the point we present terms, and on the great majority of cases it is payable on completion — so it is paid out of a facility that has actually worked for you.
On a corporate borrowing entity, almost always. An SPV with no trading history and one asset gives a lender nothing to pursue, so guarantees from the directors are standard.
What is negotiable is scope — capped guarantees, and guarantees limited to fraud, wilful default and misrepresentation, exist on some facilities. Worth asking about, and worth independent legal advice before signing.
It turns on tax, and it is a question for your accountant rather than your broker. Broadly, higher-rate taxpayers building a portfolio tend toward a limited company because finance costs are treated differently; a basic-rate taxpayer with one or two properties often does not.
What we can tell you is the funding difference: company lending is assessed at 125% cover rather than 145%, so it usually supports a larger loan, at a marginally higher rate, with directors' guarantees. Decide the structure before you offer — moving a property between structures later is a sale, with stamp duty and possibly capital gains tax attached.
Yes, with a smaller panel. Many lenders set a minimum personal income of £25,000; a number have no minimum at all and assess purely on rental cover.
Where you have no employment income, expect more scrutiny of how you meet voids and maintenance, and be ready to evidence reserves.
For a small HMO, most lenders value on comparable bricks-and-mortar — what the house would sell for as a house — which is often well below what you paid to convert it.
For larger licensed HMOs, some specialist lenders value on investment yield, capitalising the rental income. That can produce a materially higher figure and a materially larger loan. Which basis applies is a lender-selection decision, and it is the single biggest variable on an HMO case.
Yes, and it is the standard exit. The one thing to check first is the lender's ownership requirement — many will not remortgage a property owned for less than six months, and those that will may lend against the purchase price rather than the new value.
Where a refurbishment has genuinely added value, lenders who will lend against the improved value inside six months do exist. Line that up before you draw the bridge, not after.
The loan reverts to the lender's standard variable rate, which is usually materially higher. Most landlords remortgage or take a new product with the same lender.
Start four to six months out. If rental cover has weakened since you took the original loan, a product transfer with your existing lender may not require a fresh affordability assessment, where moving lender would.
Six to twelve weeks from submission to completion is normal. Underwriting is slower than bridging because the lender is assessing trading performance or a lease as well as the property, and the valuation is a fuller instruction.
The controllable part is how complete the submission is. Filed accounts, up-to-date management figures, a business plan and the lease pack ready at the outset removes the most common two-week delay.
On investment property, frequently — commonly for a five-year term with a review, sometimes longer where the lease supports it. On owner-occupied premises it is less common and usually part-amortising instead.
Interest only improves cash flow and increases total cost. It also concentrates risk at the end of the term, when the balance has to be refinanced or repaid in full.
No. Lenders add back directors' salary and dividends, pension contributions, depreciation, amortisation and genuine one-off costs to reach an adjusted figure. A business that looks marginal on filed profit is often comfortably affordable once adjusted.
What matters is evidencing the add-backs. An accountant's letter and clean management accounts do most of that work.
Often, at a lower loan to value and a shorter term. A two-year unexpired lease to a strong covenant is a different case from the same term to a new company with no filed accounts, and both differ from vacant possession.
Where the tenant is the weak point, some lenders will look through to your wider portfolio or trading business instead. That is a placement question, and it is why the lender is chosen before the application goes in.
A SIPP or SSAS can buy commercial property and lease it back to your trading company, and the pension can borrow up to 50% of its net asset value to do it. It is a well-established structure with real tax advantages.
It also has hard rules on rent, valuation and connected-party transactions, and needs your pension trustee and accountant involved from the start. We arrange the borrowing; the pension advice must come from your regulated adviser.
Typically 10% to 15% of total project cost, and it goes in first — usually as part of the land purchase, before the lender releases anything.
Lenders look at total cost, not just the land: purchase price, build, professional fees, finance costs, contingency and sales costs. Equity calculated only against the land price is the most common reason a scheme is short at the start.
You can fund the land purchase, but not on development terms. A site without consent is bridged or funded as land, at a materially lower loan to value, and the development facility replaces it once permission is granted.
Some lenders will agree a development facility subject to a satisfactory consent, which converts on grant. Worth setting up in advance rather than starting again afterwards.
Tell the lender early. An overrun flagged in month eight with a revised programme is an extension conversation. The same overrun discovered by the monitoring surveyor in month sixteen is a different and much more expensive one.
Extensions typically carry a fee and, where the market has moved, a repricing. They are almost always available where the scheme is progressing and the exit is intact.
Usually yes, as part of total project cost, provided they are in the cost plan at the outset. Fees discovered after the facility is sized come out of your contingency or your pocket.
Community infrastructure levy and section 106 payments are often required at commencement, which can be an early and substantial cash call. They belong in the cash flow from day one.
Not always, but the more the scheme relies on a single main contractor, the more likely a lender is to want a formal contract, collateral warranties and evidence the contractor can carry the job.
Self-managed schemes with a package of trades are fundable and common at smaller scale — typically up to around six units. Above that, most lenders start asking for a main contractor and a formal contract, and we will tell you early which camp your scheme falls into so the procurement route is settled before terms are sought.
5 questions
Applying
Less than most people expect. The address and tenure, what you are paying or what it is worth, how much you need, what the money is for, how you intend to repay it and by when, plus who is borrowing — you personally, a limited company, an SPV or a partnership.
That is enough for real indicative terms from named lenders. Documents come after you have decided the terms are worth pursuing.
For a security-led facility: identification and proof of address, the purchase contract or title, a schedule of works if there are any, and evidence of the exit — an agent's appraisal or a term lender's agreement in principle.
For a commercial mortgage: two to three years of filed accounts, current management figures, recent business bank statements, the lease pack if it is an investment purchase, and a short business plan.
For development finance: the cost plan, the programme, planning consent, drawings, your CV of completed schemes and details of the contractor or trades.
It depends on tax, on what you already hold and on what you plan to do with the asset, and it is a question for your accountant rather than your broker. What we can tell you is how the choice affects the borrowing.
A company borrowing usually means a debenture and personal guarantees from the directors. A newly incorporated SPV with no history is normal and not a problem for lenders in this space. Personal borrowing can be simpler and quicker but exposes you directly.
Get the structure right before you exchange. Changing the borrowing entity after exchange means starting the application again.
Bridging: two to six weeks in practice, and the constraint is almost always valuation availability and the solicitor's title work rather than the lender.
Development finance: four to ten weeks, because the monitoring surveyor's initial report sits inside the process.
Commercial mortgages: six to twelve weeks, because trading performance or a lease is being assessed alongside the property.
The controllable part is preparation. A case that arrives with its documents in order and its complications disclosed regularly completes weeks ahead of the identical case that does not — which is what the preparation guide in Resources is for.
Almost always something that surfaced late rather than something that was insurmountable. A restrictive covenant on the title, a second charge never registered as satisfied, a tenant in arrears, a director's CCJ, an undischarged planning condition.
Raised at the first conversation, every one of those is workable — we simply place the case with a lender whose criteria accommodate it. That is why we ask the awkward questions early.