Bridging finance rates

[So]

We're selling a property to a chap who is dependent upon the sale of another property. The buyers of that property are messing about.

I am tempted to offer the chap bridging finance - he'll need about £60k. But what is the current going rate? Open bridging.

[anonymous-user]

Between 1% and 4% per month depending on the strength of the security and status of the borrower.

Maybe less for you due to the other upside.

[So]

desolate said:

Between 1% and 4% per month depending on the strength of the security and status of the borrower.

Maybe less for you due to the other upside.

Secured upon the property he is buying from us. I've no idea what he looks like credit wise. He is a 70 year old gent with half his late mother's house to his name and, I gather, £100k to put in himself.

I don't think I would want to do it for 1% per month. I had in mind 2% plus £500 fee in and out.

[anonymous-user]

So said:

Secured upon the property he is buying from us. I've no idea what he looks like credit wise. He is a 70 year old gent with half his late mother's house to his name and, I gather, £100k to put in himself.

I don't think I would want to do it for 1% per month. I had in mind 2% plus £500 fee in and out.

There's your answer then!

[So]

desolate said:

So said:

Secured upon the property he is buying from us. I've no idea what he looks like credit wise. He is a 70 year old gent with half his late mother's house to his name and, I gather, £100k to put in himself.

I don't think I would want to do it for 1% per month. I had in mind 2% plus £500 fee in and out.

There's your answer then!

Just because I have it in mind doesn't make it right. In fact some things in my mind are very, very wrong at times

[anonymous-user]

So said:

Just because I have it in mind doesn't make it right. In fact some things in my mind are very, very wrong at times

I always think it is very expensive, but I would imagine he would struggle to get terms at 70 years of age. So 2% pcm plus fees wouldn't be massively out of kilter with the market as I remember it (not been involved for a couple of years)


Personally I wouldn't do it unless there is an upside for you other than financial - I am too soft and couldn't kick a non-payer onto the streets unless they were complete tts.

[So]

desolate said:

So said:

Just because I have it in mind doesn't make it right. In fact some things in my mind are very, very wrong at times

I always think it is very expensive, but I would imagine he would struggle to get terms at 70 years of age. So 2% pcm plus fees wouldn't be massively out of kilter with the market as I remember it (not been involved for a couple of years)


Personally I wouldn't do it unless there is an upside for you other than financial - I am too soft and couldn't kick a non-payer onto the streets unless they were complete tts.

The upsides are, we'd be smoothing the sale of the property - and we want to get it away. Secondly, we'd be earning 2%/month on money that's doing nothing at the moment. Thirdly, I'd get a warm feeling about having helped an elderly person secure the retirement home of his dreams.

[drainbrain]

Moneylending requires a DTI licence.

It's a criminal (not civil) offence to lend money without one.

[anonymous-user]

drainbrain said:

Moneylending requires a DTI licence.

It's a criminal (not civil) offence to lend money without one.

I think he may be able to do it using a deferred consideration agreement.

[So]

desolate said:

drainbrain said:

Moneylending requires a DTI licence.

It's a criminal (not civil) offence to lend money without one.

I think he may be able to do it using a deferred consideration agreement.

It's something I can check with our solicitor who'll be facilitating it.

[drainbrain]

So said:

It's something I can check with our solicitor who'll be facilitating it.

The licence is (or at least used to be) very straightforward and quick to obtain.

You may develop a taste for the business and even have a talent for it.

I'm essentially a property guy, but the revenue from moneylending made the property revenue look like chump change.

Edited by drainbrain on Tuesday 15th August 20:23

[So]

drainbrain said:

So said:

It's something I can check with our solicitor who'll be facilitating it.

The licence is (or at least used to be) very straightforward and quick to obtain.

You may develop a taste for the business and even have a talent for it.

I'm essentially a property guy, but the revenue from moneylending made the property revenue look like chump change.

Edited by drainbrain on Tuesday 15th August 20:23

Maybe it's a new line I could explore. It wouldn't take long to burn through a 7-figure sum if I was going bridging though.

[drainbrain]

So said:

Maybe it's a new line I could explore. It wouldn't take long to burn through a 7-figure sum if I was going bridging though.

If I told you how much it cost to get the loan biz started up you'd say I was lying.

[So]

drainbrain said:

So said:

Maybe it's a new line I could explore. It wouldn't take long to burn through a 7-figure sum if I was going bridging though.

If I told you how much it cost to get the loan biz started up you'd say I was lying.

As I recall you do a different sort of lending from what I'm talking about, don't you?

[drainbrain]

So said:

As I recall you do a different sort of lending from what I'm talking about, don't you?

Used to. Not now. Voluntarily surrendered my licence.

But I am in touch with bridgers and was hoping to give them money to lend on a split of the ante.

BTW their average charge rate is 1.5%pm

[So]

drainbrain said:

So said:

As I recall you do a different sort of lending from what I'm talking about, don't you?

Used to. Not now. Voluntarily surrendered my licence.

But I am in touch with bridgers and was hoping to give them money to lend on a split of the ante.

BTW their average charge rate is 1.5%pm

Thanks. Any fees?

[22s]

Where is the property he is selling?

[So]

22s said:

Where is the property he is selling?

Mapperley in Nottingham

[kitz]

Drainbrain
I would say £250,000 plus shop .

[DonkeyApple]

So said:

The upsides are, we'd be smoothing the sale of the property - and we want to get it away. Secondly, we'd be earning 2%/month on money that's doing nothing at the moment. Thirdly, I'd get a warm feeling about having helped an elderly person secure the retirement home of his dreams.

How warm would that feeling be when you forclose on him and watch him go broke under the cost burden of the default?

I'm inclined to agree with you that if he passes the checks then 2%/month is better than a 70 yr old is likely to be able to find and it gets your deal away.

But don't do it for any warm feeling. It's business and you may well end up having to break his balls. It's best to openly recognise that rather grim reality of lending at the outset.

It also might be sensible to uplift the rate each quarter by 1% so as to act as an ever building incentive for him to get his property sold whatever the hit to him. You don't want a 70 yr old owing you for more than is absolutely necessary. Getting your money back out through a probate would be a ball ache (but possibly hugely lucrative if you structure your loan agreement correctly).

Whatever happens, goo luck with your move.