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What is responsible for the recent rise in popularity of bridging and short term secured loans?

Recently we have noticed a big increase in uptake of our short-term secured lending products, particularly bridge-type and interest only facilities. In a time where fast access to finance is paramount, more and more clients are seeking alternatives to high street banks. The rigid underwriting and ‘tick box’ lending of the traditional providers means that introducers are increasingly referring clients to us straight away, rather than waiting for their clients to hear a ‘no’ from the banks. Strong relationships and understanding of our criteria
 
So, why can these businesses not find finance through traditional routes? Of course, some will have historic adverse credit and this always makes it more challenging to agree finance. Others will qualify for traditional loans but their need is simply more urgent than most lenders can accommodate. We are seeing more and more start-ups and growing businesses too, who may just have a slightly unorthodox story or business model, a lack of historical accounts or a downward trend in their accounts that could be explained by seasonality – with these businesses, the issue is different: no one is taking the time to get to know their story or to understand their requirement fully. Business is rarely black and white and it is in these grey areas that most of the SMEs, that form the backbone of the UK economy, will fall – many just can not afford to wait up to three months for a potential ‘no’ from their bank.
 
Another welcome trend is in our partners and introducers’ ever-improving education on alternative lenders and products. A few years ago, we would only be introduced to businesses after they had already heard a ‘no’ from a traditional lender, usually after an anxious wait. Now, businesses and introducers are choosing us. Where there is a tight deadline or the funding is needed short term, brokers are recommending clients to alternative providers much further up the process, often as the first choice, knowing the lending criteria and being confident that we can deliver – as well as give a positive borrowing-experience to a business. This only means good news for both businesses and lenders.
 
The motivation for the big increase in demand for short-term and bridging type facilities in recent months is fairly self-explanatory, once you consider the retreat in lending by the traditional providers and the position that SMEs find themselves in. Business owners are using the facilities to give themselves breathing room, to allow themselves flexibility or as a proactive tool to get in to a stronger financial position, so that they can qualify for longer-term support with their high street bank, if that is what they want or so that they can spend longer evaluating all the options on the market too.
 
Short-term secured loans are ideal for businesses who:
·      Are suddenly hit with an unexpected bill, debt or business cost that must be settled quickly
·      Need to purchase a commercial site with time sensitivity
·      Want to invest in another business or complete an MBO to a deadline
·      Experience seasonality issues, with cash flow peaks and troughs or other unplanned for periods of financial difficulty
 
At Nucleus, we take a different approach to lending. We take the time to understand what a business does, what they want and what they need. Our experienced underwriting team are equipped with digital tools to aggregate the basic company information but by combining that with a consultative approach we are able to make our decisions based on the story and Many are so impressed with the service that they renew and take out longer-term secured loans with Nucleus.
 
We can provide secured business loans, backed by residential or commercial property, from £25,000 to £20m.  To make an enquiry or apply for Property Finance, contact our team on 020 7839 9451 or email contact@nucleus-cf.co.uk.

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