Why Fast Payment is Everything
In the world of bridging and online lending, getting finance fast is key for everyone involved. Everyone wants to do business quicker and faster these days and the old days of going to the bank, filling in forms and posting them off and waiting weeks for a response is just unthinkable.
In the bridging industry, people want that fast finance to secure the property they have in mind. For buy to let investors, they are looking to complete on a property with the funds ready, before a competitor or another buyer comes and gazumps them. The company or individual will have plans to renovate and do up the property for the purpose of reselling it or renting it out to tenants.
For the purpose of auction finance, speed is everything. Those that have bought a property at auction will typically have 28 days to come up with 90% of the purchase price. Sure, most people will be able to dip into their savings or profits from other investments or also use money from other investors, but whether it is 20% or 50% of the property finance, they need funds and they need it quickly.
Realistically, most of the bridging companies we feature can actually transfer funds within the space of the just a few days. However, it is getting all the relevant paperwork and sign off that takes time between the you, the lender and your solicitor. Below we give some of our top tips to make the application and funding process faster
How To Make the Application Quicker
Finding the right loan product: Well, firstly you have to find the right loan product and you have to understand exactly what you need. If you are looking at construction costs and refurbishing a property, you will more likely need development finance rather than bridging. Therefore, you should not be wasting time researching bridging providers and instead find development specialists like Castle Trust and UTB.
Using an impartial broker like Bridging Loan Hub can help to make your life much easier. Our team has seen every type of application and scenario under the sun and should be able to tell you very quickly exactly what you need. We regularly get applications asking for one thing but needing another, so narrowing down your search can certainly speed things up, especially if its quick loans UK that you are looking for.
Complete a survey beforehand: Most lenders we work with need a RICS survey completed in order to process your application. This obviously needs arranging and setting up an appointment with a professional to come visit your property in question. Surveys from a RICS qualified surveyor are valid for several months until they have to be renewed or a new appointment is required. So to make your application quicker, you can take the initiative and arrange a survey before you have applied or as soon as possible. You will need to fit the bill of this survey yourself and typically, the bigger the property, the more expensive it is – at a maximum of £3,000.
The downside is that if you organise the survey during the application process, the lender will appoint the surveyor and include the cost in the overall loan terms, allowing you flexibility to pay if off much later.
But on the plus side, a surveyor not only gives you a solid valuation of your estate, it also points out any potential flaws or issues with the property which you may have big plans for. Things like asbestos, subsidence or construction issues could save you serious time and money in the long run – so there is certainly an advantage of having a surveyor earlier rather than later.
Get your paperwork ready: Most loan companies will request information about to confirm your identity and address. Having copies of your pay-slips, bank statements and utility bills at your address for at least 3 months can only come in handy when making your application. No need to scour around looking for them if you have them already printed and raring to go. But make sure that they are recent and not ones from last year or a previous address or employment.
Similarly, for those regulated loans that require credit checks in order to approve your application, you can make sure that you are on top of this by checking your credit report beforehand. There are free trials available on the likes of Experian and Noddle and then cost is just a few pounds afterwards per month, or you can always request a one-off statutory credit report for just £2.
You may find that in fact you have some anomalies on your report that are bringing down your credit score and actually there are some things you can do to improve it. For instance, removing any store cards or credit cards that you do not use is worthwhile as it means you have less risk of doing into debt or overspending. For the very least, you should make sure that you are on the electoral roll as submitting your address with the local authorities makes you more credible when applying for a loan.
Do your homework: Some lenders we work with need to see a business plan or some kind of proposal with your plans for the property. As a minimum, you should have a balance sheet with your estimated costs and potential profits. This means getting estimates and quotes for builders, furniture, electrical, architects, gardeners and more, prior to making your application. If you have not got this information handy and available already, it simply slows down the process of getting your funds.
Depends on the amount: Understandably, the more you wish to borrow, the more checks that need to be carried out (typically). If you are borrowing a minimum amount of £50,000, this may be easier for the lender and bank to transfer to your account in one lump. However, if you are applying for £10 million or £20 million, this may require more checks and procedures in order to transfer the money to your business.
Depends on the project: If you are a homeowner moving into another house that is already built, this may require less checks and surveys than something that is just a plot of land. Again, if there is less work for the surveyors and lenders to do, this will fast track your funding.
For more information, read the FCA’s policies on making and receiving payments.