Medium Term Loans More Popular
Just nine months ago, Drawbridge Finance, a loan company which specialises in short and medium term loans, opened its doors for new lending for the first time, with the aim of providing specialist bridging loan products.
Now, less then a year after its initial launch Drawbridge have just announced that so far this year they have provided medium term loans for a total value of more than £50 million.
The medium term loans which are being offered by Drawbridge Finance are typically designed as bridging loans for a term of 2 or 3 years and are being used predominantly by professional landlords and property investors who are unable to obtain the loans they require to develop their portfolios from more traditional loan sources, such as banks or mortgage lenders.
Drawbridge currently offer secured loans of up to 70 per cent loan to value, at an interest rate of 8.99 per cent, over a loan term of two or three years. The minimum loan amount is £50,000 and the maximum loan is £15 million and the property must have a minimum valuation of £200,000.
Jonathan Samuels of Drawbridge Finance said “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 considerable potential in the years ahead.”
“ Loans of two and 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.”
