Our Products
If you opt to submit your case to us, we will endeavour to always offer you the best and most competitive products from our panel of selected Lenders.
We see ourselves as an extension of your business and hope you will too. We can act as the gateway to and find you competitive finance solutions, matching your needs. Although our area of expertise is specialist property lending, we have exposure to alternative finance products. The main types of situations we can assist with are detailed below.
LAND ONLY BRIDGING
Buying land for development is a common practice for property investors, yet if the land has no current planning permission it can be challenging to secure finance to fund the purchase.
Bridging loans to buy land provide a funding method for developers looking to buy sites with or without planning permission. The land can be used for any purpose, including building residential homes or commercial properties. Please note that Leveo are unable to offer loans against land for an individual’s personal place of residence.
Speed can be key. These types of loans can be used for buying building plots quickly, as it can take months for long term finance to be arranged. Building plots are usually sold quickly to developers, so interested parties need to act quickly. Leveo has exceptional relationships with their Lender panel, which means you can be approved with non-binding terms on the day of application, which means we can provide an ideal solution for quick land purchases.
Additionally, a bridging loan can be used for the initial land purchase and then refinanced with a development finance product. Keeping your finance with the same Lender can be beneficial.
WHAT IS A LAND BRIDGING LOAN?
A bridging loan for land is a type of loan used specifically to buy land which usually does not have any existing buildings established on it. This type of funding is a short-term option that helps bridge the gap while organising longer term finance.
The land may have previously been used for a number of different reasons, such as equine or agricultural purposes, storage or wasteland. In these circumstances, the developer will be applying for a change of use. It may have certain planning permission already which needs amending to suit the developer’s plans.
Some mainstream lenders may not lend on land unless it has planning permission, so bridging finance can be a natural fit. Redevelopment finance or a self-build mortgage is usually then applied for, which is used to pay off the original bridging loan and commence the building project. This finance can be secured against the value of the land being purchased.
Leveo will also review land that has existing vacant premises that are currently not income baring.
Bridging loans can also be used to buy the land, obtain planning permission and then sell it on to another developer.
WHY CHOOSE A LAND BRIDGING LOAN?
The land purchase market is very competitive and when property developers find suitable land they need to make a quick purchase before another developer buys it instead. Bridging loans for land purchases can often be approved on the day of application, providing developers with the comfort and security they can deliver on any offer they wish to make. This security often puts them in a more favourable position with the vendor/selling agent.
Land can be bought at auction which is a quick process that demands an immediate deposit and the balance due with within 28 days of purchase. Bridging loans allow developers access to funding quickly, thus helping to secure auction purchases. This timeline is often more challenging for mainstream funders to adhere to. With auction sales the assets often have complications or imperfections which can make bank based lending difficult to satisfy.
It is also possible to take out the bridging loan in increments as the development progresses, rather than borrow all the money in one stage. This can save the developer money on the overall interest paid, as it is only payable on the money borrowed.
CONSIDERATIONS
During the loan approval process, Leveo will ensure there is a good exit strategy in place. This may be achieved through selling the properties built on the land, or through long-term refinancing options.
Loan terms are generally between 6-12 months and with Leveo as your broker, we will always look to negotiate the best entry and exit terms we can for you as our client.
Leveo always looks at each application holistically and on a case-by-case basis, even if the land does not have any existing planning permission.
COMMERCIAL Bridges
Investors looking to purchase commercial property often have to act quickly. If finance is already tied up elsewhere within an existing portfolio, buyers may need the option to acquire appropriate funding quickly or risk losing out on a purchase. This is where commercial bridging loans can be a helpful solution.
Long term finance can take several months to secure. Many of the best opportunities present themselves with a change of use and/or add value potential. The most experienced and successful commercial property investors often recognise this and that’s where using Leveo and their deep understanding of the investment market can help to secure you finance.
Leveo can take into account the specific circumstances around the asset and borrower, allowing for more flexible lending. This is one of the reasons property investors may choose a bridging loan for funding commercial property transactions.
WHAT IS A COMMERCIAL BRIDGING LOAN?
Commercial bridging loans are used to buy or refinance commercial property and mixed-use developments. This could include a retail unit with a flats above, an office complex, or a development area that will include residential and commercial aspects. A commercial bridging loan is a short term funding option which is generally used to bridge the gap while long term borrowings are obtained or a change of planning/use is established thus increasing the value of the security.
WHY CHOOSE A COMMERCIAL BRIDGING LOAN?
Commercial bridging loans can be used for buying a new business commercial premises or mixed-use property. If the commercial property does not qualify for a mortgage due to the current poor condition, a commercial bridging loan can allow the purchaser time to renovate it first before then applying for long term finance on the property. It can also be a good solution if there are outstanding planning issues which once resolved will make the asset better suited to the mainstream bank market.
Bridging finance is a good option when funding is needed quickly to secure the property prior to someone else buying it or if purchasing through an auction. When buying through auction it is necessary to pay a deposit immediately, followed by the full balance, usually within 28 days. Often buyers can leverage having the funds immediately available when making an offer and this could enable a discount to be negotiated.
CONSIDERATIONS
Given the borrower has an exit strategy in place, which is usually refinancing the property with longer term finance, or selling the property before the end of the bridging loan term, an application can be considered. The borrower will need to provide security to act as collateral against the loan. Applications, where the borrower has significant capital entered into the transaction, will be viewed favourably.
Our Lenders normally provide loan terms between 6-12 months. The borrower is not tied into the full term but can pay off the loan at any time within that period. Existing leases and current tenants will also need to be considered. Leveo will work through all the necessary considerations with you that are important to the Lender panel and present your case in a focused and effective manner.
Investment Property
Raising finance for buy-to-let mortgages can be a challenge for a borrower, Leveo’s lending panel can consider cricumstancs in a more flexible way taking into consideration the specific circumstances around the asset and borrower when issuing terms. Due to the strict guidelines, a buy-to-let mortgage can take a long time to be approved, which is one of the reasons property investors turn to a bridging loan for buy-to-let properties in the first instance.
Raising deposits for buy-to-let mortgages can be a challenge for a borrower, Leveo can look at Lenders who will be flexible in taking into consideration the specific circumstances around the asset and borrower when issuing terms. Due to the strict guidelines, a buy-to-let mortgage can take a long time to be approved, which is one of the reasons property investors turn to a bridging loan for buy-to-let properties in the first instance.
WHAT IS A BRIDGE-TO-LET LOAN?
A bridge to let loan is another term for a bridging loan that will be specifically used to buy a property to rent out. Investors can buy any rental property with a bridge-to-let loan, including residential and commercial. This type of funding is a short-term option that helps bridge the gap while organising long term finance.
WHY CHOOSE A BRIDGE-TO-LET LOAN?
The buy-to-let market is very competitive and when property investors spot a good deal, a quick purchase often has advantages., Bridge-to-let loans are usually approved within a short timescale allowing property developers access to funds for purchases quickly.
Properties that could be viable as a buy-to-let often come available through auctions, although they may require extensive refurbishment before being rented out (often falling outside of many lenders criteria). Bridging loans can be used when buying properties at auction which are presently not habitable. Unlike most traditional mortgage lenders, the application process for Bridging loans does not typically discount uninhabitable properties.
CONSIDERATIONS
The borrower will need an exit strategy in place, which is usually refinancing the property with a longer term buy-to-let mortgage or sale.
The loan term is generally between 6-12 months. Leveo will work through all the necessary considerations with you that are important to the Lender panel and present your case in a focused and effective manner.
AUCTION LOANS
Using Bridging Finance to Buy at Auction
Buying at auction is a different experience compared to purchasing a property through a more traditional method.
Buying at auction starts with the catalogue. After reading the publication there is time to view, study the legal pack and possibly complete a house survey. Auction property is then sold immediately on the sale day. When the hammer goes down, the buyer is fully committed to the purchase and has to usually pay around a 10% deposit of the purchase price immediately, with the balance due within 28 days. The deposit amount and timeframe for payment may vary from these.
As it can be difficult to procure a mortgage in such a timeframe, particularly if the property is uninhabitable, many investors turn to short-term auction finance options to enable them to buy quickly.
Bridging Loans for Auction Purchases
Bridging loans for auction purchases are short term funding options that help bridge the gap while long term funding is secured. Applications are often approved in just a few days. The loan period is generally 6-12 months, although typically it can be repaid at any time.
Advantages of bridging loans used for auction
The main advantage of a bridging loan is the quick application process, which ensures the funding necessary to buy a property at auction is available within the required timeframe. However, there are several other advantages, which include the following:
- A bridging loan is based on the borrower’s ability to pay the loan back within the agreed timescale, rather than solely based on income or credit history, although these factors may also be considered during the application.
- It’s possible to pre-arrange a bridging loan prior to the auction. If the bidder is successful and purchases the desired property, the bridging loan can then be fully approved.
- Bridging loans can be awarded for properties that a high street lender would normally not consider, including uninhabitable properties. The loan gives the purchaser time to carry out the renovations and either secure long-term funding when habitable or re-sell.
- Bridging loans for purchases at auction can also be used for land or commercial property purchases, as well as residential investment properties.
AUCTION LOANS – USING BRIDGING FINANCE TO BUY AT AUCTION
The quick turnaround required for auction purchases means it can be challenging to secure funding to purchase an auction property within the timescales. The auction loan fills this gap with its quick completion time for loans, from application to approval. A swift decision is guaranteed on all applications, ensuring the funds are in the bank immediately after the approval and legal process has completed.
Borrowers deal directly with a principal which ensures the application process is a swift one. Anyone in need of fast finance can apply as every application is considered individually.
Bridge to Term
A unique product we can offer our clients is our Bridge to Term product. A common predicament we hear from our clients is that they are not able to obtain finance once they have completed development or refurbishment works, which would act as a refinance for their initial bridge loan they used to purchase the property.
Our Bridge to term product allows investors to purchase an asset quickly, provide them time to get planning and complete works to enable the asset to be income producing. The property would normally be unable to show historic rental figures that would usually assist the client getting longer term bank finance.
At this juncture Leveo can then move the client from their current bridge loan onto a 3-5 year term product (this would normally be expected to be at a rate lower than the Bridging loan) as the asset is income producing and monthly payments can be made from the rent.
This is a key benefit to using Leveo’s exclusive Lender panel as we have access to this product, which is not currently widely available as an option in the market.
Development Finance
Development Finance is a widespread form of short to medium term finance used by developers to build out property development based construction projects with planning.
This finance (often taken in tranches) can range from funding the purchase of a plot of land with planning permission, to financing a building renovation, to building large housing schemes. It covers all the associated costs for materials, labour, services and professional fees for both residential and commercial developments.
Development Finance schemes are available to experienced property developers.
What is the difference between a mortgage and development finance?
Unlike a traditional mortgage that will consider the value of the property, a development finance lender will take the value of the completed property into account. Who uses development finance? It is often used by builders and developers planning extensive projects and ground-up developments.
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