Nigel Alexander, director at Fincorp, said: “Short-term funding is the life blood of auction finance and it’s a market we’ve been dealing with for 25 years.
“In the past buy-to-let lenders were the dominant force for this sort of lending but as with the wider market, they’ve cracked down on criteria and there are good deals they just won’t lend against.
“Our light refurb loan is designed with developers in mind and offers flexible finance fast to allow clients to buy undervalued properties, do them up and either refinance onto a buy-to-let mortgage or sell them on.”
The lender is also offering to do a 50:50 split on refurbishment costs with the borrower.
Chris Coleman-Smith, lead auctioneer at Savills, said: “Auction properties are usually in need of some updating and the type of finance Fincorp brings to the table is critical for buyers looking to get a deal done.
“Finance has to be fast and reliable in this business because you put down a deposit the day you buy. Bridging has become the first port of call and with Fincorp, buyers know they’ll stump up the cash.”
Brokers referring business to Fincorp have direct access to decision makers and can speak to any of the directors to get reassurance that a deal will go through.
Alexander added: “Knowing that you will get an almost immediate decision in principal is mission critical for people buying at auction.
“Even if buyers can get a mainstream mortgage, the application and approval process is so drawn out that they’ve lost the property by the time the lender delivers. Bridging fills that gap and makes the difference between a done deal and a dead deal.”
The fee-free product, which has a negotiable monthly rate and maximum loan to value of 70% irrespective of purchase price, is available immediately and is being showcased at Savills’ upcoming auction on 17 June 2013.
The loan is suitable for properties needing modernisation or the addition of facilities including a kitchen or bathrooms and which wouldn’t qualify for a buy-to-let mortgage under existing criteria in the market.
The minimum loan size is £100,000, funding is available up to £5m and the costs of refurbishment must not exceed 20% of the value of the property.
