Most standard loan applications are approved according to a strict set of criteria, but what are known as ‘complex’ loans are more flexible.
Many lenders, when considering a loan application, follow a set of tick boxes on a form. If enough tick boxes are filled in then the application is approved, and if not, it is declined.
This sounds straightforward enough, but with financial uncertainty over Brexit, some of the well-known banks are being more cautious and discretionary in their approach to lending.
There are many cases where a standard loan will be declined. Some standard lenders will not approve loans on multiple occupancy rented property, and if the borrower wants to use multiple properties to secure a large loan, this may not be approved. It makes it even more difficult if some or all of the properties are owned by a partnership. If a company wants a loan, but is incorporated outside of Britain, especially in so-called ‘tax havens’ such as the British Virgin Islands, the lender may be reluctant to approve the loan.
There are, however, many specialist lenders who will approve complex or non-standard loan applications, and a broker should be able to find an alternative lender in such a situation.
A bridging finance broker can source a loan from a lender who is used to assessing each loan application on a case-by-case basis rather than following strict guidelines.
If the loan is for property, bridging firms often have their own panel of lawyers and surveyors who can quickly perform the property valuation and take care of the legal process.