We have lenders that can arrange refurbishment finance on buy to let property, retail, industrial and office investments.

If the project is delayed or goes over budget, the lender may be able to arrange additional funding or extend the loan term. 

Yes, you should be able to use them subject to their experience and financial strength.

This type of finance is usually when there is a structural change to the building such as an extension, loft or basement conversion.

It also covers a change of planning use although with some lenders this may be covered by a light refurbishment product depending on the planning and type of work.

With most lenders it is up to 75% of the lower of the valuation or purchase price.

Some lenders will base it on the valuation if greater and others will also give you a contribution towards the refurbishment costs which can mean you get up to 85% of purchase price at completion.

Light refurbishment generally involves minor upgrades to a property.

These include redecoration (e.g. painting, plastering, or laying flooring) or the replacement of fixtures and fittings (e.g. a new kitchen or bathroom). 

It also covers damp proofing, electrics and central heating. It does not usually cover any structural work such as extensions, removal of load bearing walls. It may include loft conversions with some lenders. 

If planning is required it is usually heavy refurbishment that you need with the exception of some HMO conversions.

The interest rate for the loan will depend on various factors, such as the loan amount, loan term, type of works and the borrower’s creditworthiness. 

The loan term will vary depending on the project and time to complete. It is usually 12 – 18 months depending on the work involved.

It will be the sale of the property or a refinance to the same or different lender on a long term loan which can be against the end value once the works have been completed.

A lender will usually send a valuer or asset manager around during the term of the project.

If you are borrowing the refurbishment costs then these inspections will be more regular as they will release the funds from the refurbishment loan to you

If the refurbishment is classed as heavy you can get up to 75% of the day one value/purchase price and up to 100% of the refurbishment costs depending on the amount required, your experience and the amount of profit in the project.

With development exit finance, you can borrow up to 75% of the value of your development, depending on the lender and the specific circumstances of your project.

The term of the loan for development exit finance can vary depending on your specific needs, the equity and lender you choose. It is usually up to 12 months but can be longer.

The interest rates for development exit finance depend on a variety of factors, including the size of the loan, loan to value and the risk associated with the project.

You may have the choice of daily or monthly interest rates.

The benefits of development exit finance include fast funding, lower finance costs, and the ability to release capital from a development before sales come through. This can help you complete your project on time.

Additionally, development exit finance offers 1-24 month options, up to 75% of value, the ability to release some of your profit to go towards your next project, and a choice of daily or monthly interest rates. 

Development exit finance works by providing the necessary funds to complete your project or release capital from your development. It is also used to give you more time to sell the finished units. You can secure fast funding at competitive rates, tailored to meet your specific needs.

You should consider development exit finance when your existing development finance facility is coming to an end and sales won’t be completed in time, when development finance is more expensive or when you need to release capital from a development before sales come through.

Development exit finance is a type of finance that can be used to complete a development project, reduce finance costs, provide more time to sell, or release capital from a development.

Yes

Some lenders will work off the open market value whilst others will work off the 180 day figure, which is usually lower. This is a restricted time period to sell the property.

A minority work off the 90 day figure which is even lower, but we don’t tend to use that type of lender.

When comparing lenders the type of valuation is crucial.

I understand and agree to the terms and conditions and information outlined in this document and wish to proceed with instructing Searchlight Finance Ltd to assist with our finance application. I have authority to sign this agreement and bind any other partners or directors to the terms.

I understand when Searchlight Finance Ltd apply to a lender on our behalf Searchlight will carry out a Credit check and Identity check and the lender will do the same. This credit search will be performed to determine the credit worthiness of the applicant(s) and details of this search will form a permanent part of the credit record. I understand that repeated searches of this nature by a lender can have an adverse effect on the credit record.

If you are applying with another party, the lender may share the financial information of all parties so each applicant to the loan will be able to see the personal, financial and portfolio information of all the other applicants.

In respect of the fees payable for finance advice as detailed in this document I give authority for payment to be made to the lender using the supplied card details when the payments fall due and I understand the fees once paid are not refundable.

Developers need to arrange a building warranty for any new build and in some circumstances an office to residential conversion.

If you’re looking to sell or remortgage then a lender will require a warranty or architect certificate and each lender has their preferred provider.

New FAQ : Answer

If you own the land outright and want to discuss your project, don’t hesitate to contact us. If you have identified a project you would like to explore and you have a good idea of the likely purchase costs, build costs and its end value – it’s time to make contact.

New FAQ : Answer

New FAQ : Answer

New FAQ : Answer

New FAQ : Answer

New FAQ : Answer

Do you need a specialist solicitor used to bridging finance?

Yes. It’s essential.

If you don’t have a good solicitor the process will be extremely stressful and can even result in missing a deadline.

It’s essential your solicitor has experience of Bridging Finance and dealing with a lender’s solicitor as not all do.

Go to the Law Society website and you can search by postcode and then look at at their website to see if they have a specialist property arm. If they do call them and speak to the Department and find out how many bridging deals they do.

Quite often the lender will have a list of preferred solicitors who you can use.

Some lenders offer an attractive interest rate to hook you in and later in the process it increases when it’s too late to go to another lender

There are also lenders who offer lower rates for the first 3-6 months of the loan but  increase them after that. Often a higher rate at the beginning is better value for you.

What’s the reputation of the broker and the lender like? Some of the smaller lenders may not have the money to complete on the loan.

If your broker is not FCA regulated they won’t have direct access to all of the more established lower-priced lenders.

You can check the regulation by looking at the bottom of their emails or website and either they or the firm should be on the FCA Register.

Most lenders retain interest which increases your contribution and if you have surplus income you might be able to make the payments each month.

We will explain each option.

You will be charged a setup fee by the lender and a monthly interest rate. Some lenders also charge an exit rate.

If any work needs funding by the lender there will be additional fees. These are presented to you upfront before any commitment.

We usually arrange a term of between nine and twelve months. That gives you sufficient time to finish the project and either sell or remortgage.

If you need more time we have lenders that go up to three years although the longer the term of the loan the greater your contribution as you will have to cover the interest for the duration of the bridging loan.

Usually 65% – 75% loan to value (LTV) of the lower of purchase price or valuation  with most lenders and with some based on the valuation.

As well as finding money for the deposit, in most cases you will have to pay the lenders interest and fees upfront. 

Yes.

The lender is interested in the costs, time to complete the work, who will be doing it. planning status, your property experience and the end values.

If you are keeping it as an investment then a lease needs to be in place at the point of completion and if you have a tenant lined the proposed terms will be needed.

Not always for the bridging loan but it helps especially on a remortgage if you are planning to keep the property.

Commercial bridging finance is lending on offices, shops, industrial units, care homes, pubs, restaurants, hotels, business parks for a purchase or remortgage.

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Most lenders retain interest, and a minority roll it up and if you have plenty of surplus cash per month you might get serviced.

Retained and rolled up interest is deducted from the amount you wish to borrow. 

You have to find sufficient funds to cover the interest for the period of the loan as well as the deposit. 

Retained is the most common and for the majority of the lenders this is the only option you have.

Serviced is like a traditional mortgage when you are allowed to pay the monthly interest from your income. 

Most lenders retain interest, and a minority roll it up and if you have plenty of surplus cash per month you might get serviced.

Retained and rolled up interest is deducted from the amount you wish to borrow. 

You have to find sufficient funds to cover the interest for the period of the loan as well as the deposit. 

Retained is the most common and for the majority of the lenders this is the only option you have.

Serviced is like a traditional mortgage when you are allowed to pay the monthly interest from your income. 

It helps but not always a requirement, we have lenders for those starting out to full time investors, developers and landlords. Having experience of a similar size and cost will give you a greater lender choice on larger projects.

All brokers and lenders do not share our morals and quite often you will see a very attractive interest rate to hook you in and then further on in the process the rate increases and it’s too late to go anywhere else.

There are also lenders who offer lower rates for the first 3-6 months of the loan but  increase them considerably after that.

It can be quite difficult to buy a property, do a refurbishment and remortgage within this period. Often a longer term with a higher rate at the beginning is better value for you.

Watch out for the method of valuation. It should ideally be Open Market Value (OMV) which does not impose a time restriction on the sale. Some lenders work off 180 day or even 90 day which usually is much lower than the OMV.

Finally what’s the reputation of the broker and the lender like? Some of the smaller lenders may not have the money to complete on the loan.

If your broker is not FCA regulated  they won’t have direct access to all of the more established lower-priced lenders.

You can check the regulation by looking at the bottom of their emails or website and either they or the firm should be on the FCA Register.

You may have the quickest broker and the best lender in the market but if you don’t have a good solicitor the process may be extremely stressful and can even result in missing the auction deadline.

It’s essential your solicitor has experience of bridging finance and dealing with a lender’s solicitor as not many do.

We have a list of solicitors that understand the bridging market and some lenders  will also allow their solicitor to act for you.

Bridging Finance is based on the current value whilst Development Finance is based on the projected value once the works have been completed.

Hopefully No but it’s dependent on the lender and how aware your broker is of the market. All lenders have a minimum term which is usually one or three months, although we have seen a minority at six. No matter how early you repay the loan you will always pay the minimum term.

However some lenders, although we don’t deal with these, will take interest for the duration of the loan even if it is repaid early. Not very nice.

For example you take out a nine-month loan and repay after three, the lender will still take nine months interest.

The two most common methods are sale of the property or a remortgage. Before you go into bridging finance always ensure  you have a Plan A, Plan B and preferably a Plan C.

If it is a remortgage you need to protect your credit file as if it was a loved relative as a deterioration may affect the number of lenders who will repay the bridge.

Typically there is a lender set-up fee of 2% and interest is charged per month based on the loan to value (LTV).

Rates vary based on the amount you require, it’s LTV, the property, your experience and credit file. Please contact us if you have a particular project in mind.

In addition there is a valuation fee, your solicitors and most of the time the lender’s solicitor. Occasionally there is an exit fee based on a number of months interest, although this is rare.

If you are carrying out a refurbishment the lender may carry out a mid term inspection and you are responsible for the fee.

A minority of lenders will do six months, most 12 months and for larger projects we can obtain finance up to 2 years or longer.

There is no one answer for everybody. It depends on your personal situation, the property and your plans for it. A minimum value of £75,000-£100,000 is required by many lenders and you can get up to 75% of the value of the property.

For certain types of refurbishments you can apply up to 85%.

If you can provide additional property as security 100% is also possible.

Bridging finance can be used for residential property, land ,commercial property including offices, retail and industrial units. 

Yes you can. Typically heavy refurbishment covers structural or work that requires planning permission e.g. extensions and loft conversions. It can include commercial to residential conversions or a conversion into an HMO.

Experience is preferred of one similar project of size and cost over the last five years but if it’s your first time, there are still lenders for you.

Yes you can. Typically a light refurbishment is improving a property and there is no structural work. It usually includes a replacement kitchen, bathroom, decoration, flooring, resolving damp issues, rewiring, heating, replacement doors and windows.

Yes,Yes,Yes.

You may have the quickest broker and the best lender in the market but if you don’t have a good solicitor the process will be stressful.

It can even result in missing the auction deadline.This means that you could lose your deposit and be sued by the seller.

It’s essential your solicitor has experience of Auction Finance and dealing with a lender’s solicitor, as not many do.

If you only remember one point from this page this should be it. Getting into bridging is a lot more straightforward than getting out. If you are looking to sell to repay the loan you need a plan B, which is usually a remortgage of the property.

When we receive an enquiry we spend our time initially on it’s repayment which gives the lender and more importantly you, the confidence that all your options have been considered.

The last thing anybody wants is sleepless nights worrying how a loan is going to get repaid.

Unfortunately we have seen numerous examples where the focus has purely been the bridging loan and the exit hasn’t been considered.

All brokers and lenders do not share our morals and quite often you will see a very attractive interest rate to hook you in and further on in the process the rate increases when it’s too late to go anywhere else.

Some lenders have lower rates for shorter terms. You need the term to finish what you want to do and then sell or remortgage.

There are also lenders who offer lower rates for the first 3-6 months of the loan but  increase them considerably after that.

It can be quite difficult to buy a property, do a refurbishment and remortgage within this period. Often a longer term with a higher rate at the beginning is better value for you.

Watch out for the method of valuation. It should ideally be Open Market Value (OMV) which does not impose a time restriction on the sale. Some lenders work off 180 day or even 90 day which usually is much lower than the OMV.

Finally what’s the reputation of the broker and the lender like? Some of the smaller lenders may not have the money to complete on the loan.

If your broker is not FCA regulated  they won’t have direct access to all of the more established lower-priced lenders.

You can check the regulation by looking at the bottom of their emails or website and either they or the firm should be on the FCA Register.

It’s dependent on you, the property, your intentions and the amount of the loan.

Buying a property to do a light refurbishment will have a lower rate than a basement or loft extension.

As well as the setup fee which typically is 2% there will be a monthly interest rate, valuation fee and usually two sets of solicitors.

Normally you would appoint your own and pay for the lenders. There are some lenders who allow you to use theirs which reduces costs and speeds the process up.

If there is heavy refurbishment and you are borrowing against the future value of the property there may be additional monitoring costs as well.

There will also be a broker fee for the work involved in arranging the finance and dealing with all parties to ensure that it completes on time.

We are very transparent and will provide details of the rate and fees before you enter into any commitment.

We usually arrange a term of between nine and 12 months.

That gives you sufficient time to complete the project and either sell or remortgage.

If it’s a longer project we have lenders that go up to 36 months.

Yes you can.

Please send a link to the auction house, lot number, your bid price, details of the project and your experience along with costs, timescale and end value.

We will approach lenders on your behalf to obtain competitive funding so you have the comfort of having the finance in place before bidding commences.

Auction Finance can be used for the purchase of residential and commercial property including offices, retail and industrial units. 

There are some lenders who don’t require valuations and this is a major selling point, however in our experience it is recommended.

If you don’t get one, when it comes to sell or remortgage and the valuer identifies a problem that hasn’t been rectified you may not be able to repay your bridging loan on time.

It’s far better to know any issues before you do any work as it will be more cost-effective for you.

Between 75% – 85% loan to value (LTV) of the lower of purchase price or valuation on residential with most lenders and with some based on the valuation.

As well as finding money for the deposit, in most cases you will have to pay the lenders interest and fees upfront.

With commercial property the LTV is usually 65% – 75%.

A form of short-term finance also known as bridging finance.

It’s used to finance properties purchased at auction as you usually have 28 days to complete although could be less or more.

Long-term lenders are usually not quick enough to deliver within this timescale.

If you wish to register a complaint, please contact us: in writing at Searchlight Finance Ltd, 98 King Street, Knutsford, Cheshire, WA16 6HQ or by phone on 01565 654005 or email feedback@searchlightfinance.co.uk

If you cannot settle your complaint with us, you will not be entitled to refer it to The Financial Ombudsman Service. Investment Buy-to-Let Finances, Unregulated Bridging Finance and Development Finance are not regulated by the Financial Conduct Authority so you will have no recourse under the Financial Services Compensation Scheme.

Our fee is non-refundable, should your application be discontinued for any other reason including but not limited to circumstances where:

– we are unable to secure a formal finance offer as a result of inaccurate information provided by you about your personal circumstances, the proposed property details, materially inaccurate information which we have relied or your non-disclosure or non-provision of relevant information as required by the lender.

– we can secure a suitable finance offer for any mortgage which would reasonably enable your transaction to proceed.

– you choose to withdraw from the property transaction or terminate the mortgage application process.

– the vendor withdraws from the transaction.

At our discretion we may transfer part or all the fee to a future application with us if we receive the replacement application within twelve months.

£500 is payable on application (see refund policy)

• BTL – If additional work is required further fees may be payable. This includes  business plans, more than two applicants, change of property, expat or a complex application. You will always be notified in advance if an additional fee is needed.

• Commercial Property and Bridging Finance up to 1% of the loan amount payable on offer but may be deferred to Completion. You will always be notified in advance what fee is payable and when.

We may also be paid a procuration fee by the lender. You will receive an illustration which will tell you about any fees relating to the finance and the amount of commission we will receive.

We may reduce our fees depending on the loan amount, the volume of business you give us and as a thank you for your referrals.

We do not give advice on the ownership structure and the property being a suitable investment. By placing an application with us we expect you to have carried out your own research and taken professional advice.

By accepting our conditions, you confirm we have not provided this advice to you.

Landlords in the UK must comply with the Minimum Energy Efficiency Standards (MEES) Regulations, Landlords currently need an Energy Performance Certificate (EPC) rating of E or higher. Properties with an EPC rating of F or G cannot be rented out.

The government is looking into amending the minimum rating from E to C by 2030. Please consider this changing legislation when choosing your mortgage and/or purchasing a property that does not meet these criteria.

We will advise and make a recommendation for you after we have assessed your needs.

We offer a comprehensive range of secured property finance from across the market, but not finance that you can only obtain by going directly to the lender.

Searchlight Finance Ltd is authorised and regulated by the FCA (Financial Conduct Authority), registration number 743220. You can check this on the FCA’s website fca.org.uk/register or by contacting the FCA on 0800 111 6768.

This document relates solely to Investment Buy-to-Let Finance, Unregulated Bridging Finance and Development Finance that are not regulated by the Financial Conduct Authority (“FCA”). Use this information to decide if this service is right for you.

It can be a lot. Daily interest is preferable when the lender calculates interest surprisingly on a daily basis. For monthly interest if the loan was taken out on 1st August ,the first month’s interest finishes on 31 August.

If the loan is repaid on 1st September you would pay an extra month’s interest even though it is only for one extra day.