Imagine the scenario: your client approaches you to tell you they’ve identified a fantastic investment opportunity they want to be part of. In the next four weeks, they need £1 million to invest in the project; otherwise, they will have to back out of the deal, potentially losing very significant gains. Let’s say your client is worth more than £15 million. They hold this wealth in various properties, luxury assets, diversified investments, and a successful family business. Despite their net worth, your client doesn’t have enough cash available to invest this amount. Your client asks you to help them borrow the £1 million quickly…what do you do?
Logically, you would probably choose to approach your client’s bank or another lender to see if your client can borrow. In many cases, your client’s bank will happily consider lending money to your client. If your client’s usual bank can’t cater to the scenario but your client is on solid financial ground otherwise, another bank or mainstream lender will likely be able to lend.
The challenge in these cases is rarely finding a lender that can grant your client a loan. Instead, the test will invariably be finding a lender that can lend as quickly as your client needs. By the time you have approached the bank on behalf of your client, negotiated the terms and rates, and the bank has gone through its underwriting processes, weeks and weeks have gone by. In the meantime, your client has lost out on their opportunity.
Borrowing £1million or more quickly
If your client needs to access funds quickly, it is worth exploring with banks if this is a possibility, sharing your client’s deadline upfront before negotiations progress beyond initial discussions.
While banks and mainstream lenders are perfect for situations with comparatively little urgency, they are not always ideal if your client absolutely and definitively needs to draw down the capital in 2-8 weeks. When your client needs to borrow money very quickly, you may find searching for an alternative solution will be more beneficial. A regular route is to arrange for a short-term loan which is a highly practical interim solution. The short-term loan covers your client’s immediate needs, and they ultimately replace it with a long-term loan which you have ample time to arrange with a bank or other lender on behalf of your client.
Various short-term loans are possible when your client needs to borrow quickly: authorised overdrafts, borrowing against securities, bridging finance and using credit cards can be options. Whether these are worth exploring or not will depend on your client’s needs, how long they want to borrow for, and any relevant restrictions. Although it sounds outlandish, there are situations where an authorised overdrafts or using credit cards can provide the desired outcome for example, although you and your client need to be advised carefully and understand fees. Lombard loans are also popular in this respect, and again, personalised advice is a must.
Short-term loans against property
Tenn Capital offers short-term loans secured against your client’s high-value residential property, and these can be another option for short-term lending. These loans are commonly known as bridging finance.
We lend upwards of £1 million, and we can lend in other currencies or cross-border deals. When we have everything we need in terms of paperwork and documentation, your client will be able to draw down funds exceptionally fast – sometimes in as little as two weeks. The amount your client wants to borrow doesn’t affect how quickly we can lend, providing we have the documentation to do so. In other words, a £5 million loan doesn’t take longer to complete than a £1 million loan, for example.
Bridging finance is much faster than other more ‘traditional’ types of borrowing (mortgages, business loans) because our underwriting process focusses on the borrower, their financial situation, the property, the borrower’s objectives and the exit (how the loan will be paid back). Our underwriting processes are exceptionally thorough, and we can cover more ground than banks in less time, using the best law firms and valuers to work on the deal and see it completed quickly.
What can short-term loans be used for?
We lend against prime property in the UK or select international jurisdictions. We are happy to see loan capital deployed so HNWI can:
- Invest in ambitious ventures (investments, diversify assets, create liquidity to solve problems etc.)
- Grow a business (acquisitions, investment into growth, working capital, etc.)
- Invest in a high-ROI project
- Buy other appreciating assets
- Consolidate or pay off debt
Get in touch
If you or a client would like to understand more about how quickly we can lend or learn more about what we do, get in touch. We’d be delighted to have an informal chat and explain more about our process and your possibilities