Understanding short term lending

This specialist area of property finance is similar in many ways to term lending, although it does require a specialist partner to guide you through the process and protect your project. Prosperity Law is that specialist partner.

Short term lending has one significant benefit that attracts those who are looking to purchase property: it can be processed by the lender in a comparatively short amount of time. The whole process moves swiftly; processing the borrower’s application, obtaining valuations, and completion of the legal work before the loan in complete and finances are released.

Given that borrowers looking for Bridging finance often don’t require a long-term arrangement, this type of funding typically covers a period of 3 – 18 months.

Within these sort of transactions, the solicitor’s role is vital. When representing a lender client, there are a variety of tasks to be completed, including due diligence, protecting the lenders’ interests, and drafting security documentation which includes: A facility letter, legal charge, debenture, and personal guarantee.

When representing a borrower, we always ensure that the advice we provide outlines the major terms of the loan, highlighting key points such as default interest.

Our expertise

There are a myriad of tasks required within a bridging loan, on both the lender and borrower’s sides. We operate under a number of service areas, including both regulated and unregulated lending spheres, acting on both dual and sole representation basis (where applicable), perfecting security over all manner of asset category, including residential and commercial. Specific services we provide include, but are not exclusively limited to:

• Drafting and registering securities. Including legal charges, personal and corporate guarantees, debentures, assignments of rights under development agreements, assignment of life policies, and charges over deposit accounts
• Advising on and drafting loan agreements, and facility letters
• Helping lenders with their due diligence
• Working with both valuers and insurers
• Intercreditor arrangements, including deeds of priority and subordination
• Amendments, waivers, variations under loan and security documents
• Title diligence on commercial and residential property transactions
• Preparation and review of reports and certificates of title
• Advising and reporting on construction documents associated with development finance

What types of projects qualify?

Bridging Finance is available across a variety of property classes, including residential, commercial and semi-commercial.

Our team have experience of working with both borrowers and lenders on the full spectrum of services related to loan transactions, where the primary security is property. Our advice is honest, transparent, pragmatic, and guides clients on whichever side securely through the, sometimes complex, process.

We can advise on real estate and insolvency working with large scale portfolio refinance work (in circumstances involving residential secured lending).

Who we work with

We work with both lenders and borrowers in short term property finance transactions.

Our borrower clients cover an array of organisations, including individuals and start-ups businesses. In each case no matter the client, we aid the client with refinancing, advice on structuring, shareholder relationships, and raising capital. The latter is a key step for many entrepreneurs and small businesses – we make that process simpler and more easily understood.

If you think we can help with your next property transaction or you want to explore short term financing options, get in touch below.