How to apply for a bridging loan with Stretton Capital
Every lender has their own process, quirks and idiosyncrasies when it comes to how they process loan applications.
Because of that, it is difficult to know what a particular lending is looking for when you submit your deal to them.
So in an effort to show you how simple it is to submit a bridging loan or development finance application to Stretton Capital, we have broken down the steps and requirements for you.
- Once we receive your new loan enquiry, we will assess it. At this assessment stage we will ensure the numbers work for us; That is ensuring that the Loan to Value (LTV) works for us, the Loan to GDV also works and that the day 1 loan (if a bridging loan) also fits with us.
- Once we are happy with the numbers, we will produce what is known as formal Heads of Terms to be sent to the client. These Heads of Terms will outline the monthly interest rate that will be charged, the lender arrangement fee, exit fee and a list of additional fees such as late payment or default fees.
- Once the client (borrower) accepts by signing and returning the Heads of Terms, we will write what is known as a ‘one pager’, effectively a 2 page document (ok, so a two pager!) outlining the deal specifics with narrative on the scheme and the borrower. When completed, the credit paper (as it’s known) will be submitted to our Credit Committee.
- Within 24 hours, the Credit Committee will either approve, decline or ask for further information to help them make a decision. If approved then a Surveyor will be instructed immediately to carry out a valuation and a Solicitor will be appointed to represent us.
- Whilst we are awaiting the valuation report we will start underwriting the case and making the various checks that need to be done for us to be happy with both the borrower, the location and the subject security (property or land).
- When the valuation report comes back in and we are happy that the value of the security is as originally described, our solicitors will liaise with the borrowers solicitors to finalise the deal.
- Finally, once our solicitors are happy, they will transfer the funds to the borrowers solicitors client account and the deal is completed.
The next time the borrower will hear from Stretton Capital is when our loan is due for repayment. The borrower will usually do this by either selling the property (and hopefully realising a profit) or by refinancing the loan to another long term lender.