Medium-term loans are essentially bridging loans of two to three years and are increasingly used by portfolio landlords and professional investors when they fail to meet the automated credit scoring requirements of a high street lender, e.g. due to loan size, portfolio structure or because the application is by a limited company.
Jonathan Samuels, CEO, Drawbridge Finance, commented: “The growth in our medium-term loan book reflects the difficulties many prospective borrowers are having securing finance at traditional lenders.
“The black and white criteria of the high street banks are creating a buoyant new loan market and one that we believe has considerably potential in the years ahead. Loans of two to three years can be the perfect solution when an application falls just outside the tramlines of a mainstream bank and is rejected, even if the borrower is good quality and low risk. In some cases, of course, they can be the most suitable option from the very start.”
Drawbridge Finance is currently offering loans of two and three years up to 70% LTV at 8.99% per annum. Minimum loan size is £50,000, maximum loan size £15m. The property must have a minimum value of £200,000.