BESPOKE BRIDGING LOAN

& SHORT TERM LENDER

THIRD CHARGE

BRIDGING LOANS

KNOWLEDGE BASE

The   tremendous   growth   in   short-term   loan   volumes   in   recent   years   reflects   just   how   important   these   loans   have   become   to   a   diverse   range   of businesses   and   individuals.   Short-term,   business   use   bridging   loans   combine   the   speed   of   personal   loans   with   loan   sizes   that   can   be   comparable   to standard term mortgages. There are many reasons why businesses and individuals decide to opt for a short-term bridging loan, but what exactly is a third charge bridging loan? Third   charge   bridging   loans   can   be   obtained   if   the   mortgaged   property,   be   it   residential   or   commercial,   still   has   enough   equity   left/the   loan   to   value (LTV)   is   low   enough   for   a   lender   to   consider   offering   a   third   charge   loan.   The   creation   of   a   third   charge   bridging   loan   will   usually   require   the   consent of both the first and second charge lenders. A   third   charge   bridge   loan   ranks   behind   both   the   first   and   second   charge   loans   in   priority.   If   the   borrower   has   missed   payments   on   either   the   first   or second   charge   loans   the   lender   in   default   can   potentially   repossess   and   sell   the   security   property   to   recover   their   monies.   In   this   situation   a   third charge   lender   that   repossesses   and   sells   a   property   will   only   be   able   to   recover   their   outstanding   debt   when   all   the   pending   liabilities   of   the   first   and second charge lenders have been repaid. Whilst   a   third   lender   has   equal   rights   to   instigate   possession   proceedings   in   the   event   the   client   defaults   their   loan   (irrespective   of   the   conduct   of   the first   and   second)   they   need   to   ensure   the   first   and   second   charge   lenders   are   redeemed   in   full   upon   sale   of   the   security   property   before   they   can apportion any remaining funds to settle their own debt. The   greater   risk   and   typically   higher   LTVs   of   third   charge   bridge   loans   is   reflected   by   the   fact   that   very   few   lenders,   even   bridging   specialists,   will consider   writing   them.   Those   that   do   will   charge   a   rate   commensurate   with   the   higher   risk   profile.   As   a   result,   they   are   generally   more   expensive   than first and second charge bridging loans. Third   charge   bridging   loans   can   be   particularly   useful   in   situations   where   redeeming   the   existing   first   charge   might   incur   serious   redemption penalties   or   the   existing   first   charge   lender   is   looking   to   materially   increase   the   rate   applied   to   a   new,   larger   first   charge   loan.   Equally   it   might   also   be the   case   that   redeeming   the   second   charge   could   incur   early   settlement   charges   or   the   loss   of   an   attractive   commercial   rate.   In   such   circumstances   a third charge loan might be the clients best option to raise additional funds whilst leaving their existing loans in place. Still unsure and need to explore your options? Why not consult an expert? Central   Bridging   are   bridging   loan   specialists   with   a   great   track   record.   We   are   a   principal   lender   offering   a   range   of   loan   facilities   for   business   use from £250K to £2.5M over periods from 3 to 24 months. Our loans are secured on freehold property across England and Wales. Crucially   you   will   always   speak   to   a   decision   maker   who   will   take   time   to   understand   you   and   your   situation   and   unlike   some   of   the   bigger   banks   will then tailor a solution that best suits your needs rather than their own. For a confidential discussion in the first instance contact us on:   Tel 03332 400 506   Email enquiry@centralbridging.co.uk Online
Central Bridging, Granary Wharf, Wharf Road, Burton on Trent, Staffordshire, DE14 1DU Tel: 03332 400 506   Email: enquiry@centralbridging.co.uk   Web: www.centralbridging.co.uk Central Bridging is a trading style of Central Bridging Loans Ltd. Registered in England & Wales | Company Registration Number 07728274. Central Bridging is not regulated by the Financial Conduct Authority (FCA). All loans arranged by Central Bridging are non regulated contracts as defined under The Financial Services and Markets (Regulated Activities) Order 2001 and the Financial Service and Markets Mortgage Credit Directive Order 2015. © Copyright Central Bridging Loans Limited Privacy Policy
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BESPOKE BRIDGING LOAN

& SHORT TERM LENDER

The   tremendous   growth   in   short-term   loan   volumes   in   recent   years reflects   just   how   important   these   loans   have   become   to   a   diverse range     of     businesses     and     individuals.     Short-term,     business     use bridging   loans   combine   the   speed   of   personal   loans   with   loan   sizes that can be comparable to standard term mortgages. There   are   many   reasons   why   businesses   and   individuals   decide   to   opt for    a    short-term    bridging    loan,    but    what    exactly    is    a    third    charge bridging loan? Third    charge    bridging    loans    can    be    obtained    if    the    mortgaged property,    be    it    residential    or    commercial,    still    has    enough    equity left/the   loan   to   value   (LTV)   is   low   enough   for   a   lender   to   consider offering   a   third   charge   loan.   The   creation   of   a   third   charge   bridging loan    will    usually    require    the    consent    of    both    the    first    and    second charge lenders. A   third   charge   bridge   loan   ranks   behind   both   the   first   and   second charge    loans    in    priority.    If    the    borrower    has    missed    payments    on either    the    first    or    second    charge    loans    the    lender    in    default    can potentially   repossess   and   sell   the   security   property   to   recover   their monies.   In   this   situation   a   third   charge   lender   that   repossesses   and sells   a   property   will   only   be   able   to   recover   their   outstanding   debt when   all   the   pending   liabilities   of   the   first   and   second   charge   lenders have been repaid. Whilst     a     third     lender     has     equal     rights     to     instigate     possession proceedings   in   the   event   the   client   defaults   their   loan   (irrespective   of the   conduct   of   the   first   and   second)   they   need   to   ensure   the   first   and second   charge   lenders   are   redeemed   in   full   upon   sale   of   the   security property    before    they    can    apportion    any    remaining    funds    to    settle their own debt. The   greater   risk   and   typically   higher   LTVs   of   third   charge   bridge   loans is   reflected   by   the   fact   that   very   few   lenders,   even   bridging   specialists, will     consider     writing     them.     Those     that     do     will     charge     a     rate commensurate    with    the    higher    risk    profile.    As    a    result,    they    are generally more expensive than first and second charge bridging loans. Third   charge   bridging   loans   can   be   particularly   useful   in   situations where     redeeming     the     existing     first     charge     might     incur     serious redemption   penalties   or   the   existing   first   charge   lender   is   looking   to materially   increase   the   rate   applied   to   a   new,   larger   first   charge   loan. Equally   it   might   also   be   the   case   that   redeeming   the   second   charge could    incur    early    settlement    charges    or    the    loss    of    an    attractive commercial   rate.   In   such   circumstances   a   third   charge   loan   might   be the   clients   best   option   to   raise   additional   funds   whilst   leaving   their existing loans in place. Still   unsure   and   need   to   explore   your   options?   Why   not   consult   an expert? Central   Bridging   are   bridging   loan   specialists   with   a   great   track   record. We    are    a    principal    lender    offering    a    range    of    loan    facilities    for business   use   from   £250K   to   £2.5M   over   periods   from   3   to   24   months. Our    loans    are    secured    on    freehold    property    across    England    and Wales. Crucially   you   will   always   speak   to   a   decision   maker   who   will   take   time to   understand   you   and   your   situation   and   unlike   some   of   the   bigger banks   will   then   tailor   a   solution   that   best   suits   your   needs   rather   than their own. For a confidential discussion in the first instance contact us on:   Tel 03332 400 506   Email enquiry@centralbridging.co.uk Online
Central Bridging, Granary Wharf, Wharf Road, Burton on Trent, Staffordshire, DE14 1DU Tel: 03332 400 506  Email: enquiry@centralbridging.co.uk Web: www.centralbridging.co.uk Central Bridging is a trading style of Central Bridging Loans Ltd. Registered in England & Wales | Company Registration Number 07728274. Central Bridging is not regulated by the Financial Conduct Authority (FCA). All loans arranged by Central Bridging are non regulated contracts as defined under The Financial Services and Markets (Regulated Activities) Order 2001 and the Financial Service and Markets Mortgage Credit Directive Order 2015. © Copyright Central Bridging Loans Limited Privacy Policy
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THIRD CHARGE

BRIDGING LOANS

KNOWLEDGE BASE

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