We’ve looked at what conditions there are, what items affect the ability to raise money, like having a good credit file, making sure there is enough equity in the asset to raise money against and other techniques.

What are the various different methods of raising finance?

So the obvious, easy, transparent, quick way of raising money is institutional. You got good credit line, you’ve got a good job, you got your strong profile, and you are in a good financial position. Your equity is strong. You’ve got a strong portfolio with income.

Then it becomes quite straightforward to look at institutional refinance, which normally works out very much cheaper than private lending houses. Taking out the bridge obviously will come with expensive. But we’ll talk about that at the end expenses of picking out refinance to pay off your bridge set for your debt.

So the first thing obviously is at the top of the chain. Most important thing starts with credit and equity in your assets. As we discussed, institutional lenders will do that so that’s easy. Make an application, have an IFA meet and visit you do an assessment and confirm whether you can or cannot raise any equity. Pay off your debt.

So either you have some outstanding legal issues, additional borrowing that also has to be taken into account restrictions on the properties because of somebody’s outstanding debt.

And then you have the matter of the asset being owned by more than one person. You have more than one person owns the asset. Then effectively you are required to take permission. Then I’ll give you permission. Even if they’re not the owner of the asset, it could create a problem. It could create a matter unknown to the borrower about the lending. Then after the standard institution, you have your bank so your bank can borrow your money, lend you money that can  could be for a certain number of years and it could be done as a second charge or even a third charge on your property to take out enough money to be able to pay off your debt. Standard High Street banks do sometimes do those loans and they secure them against your asset. So as long as they know they’ve got money secured, they will give you the money to pay off your debt.

So then comes somebody’s got credit problems. Somebody’s got his credit history problem. Even if your bank accepts you. Normally there’s a cutoff point with the banks where they won’t accept somebody with a seriously bad credit. They’ll only accept somebody who’s got some bad credit, but they can see from their bank account that they are operating and managing their money in a decent way.

After that come the private lending houses. So top of the list this is more of a guess rather than fact.  I don’t want anybody coming back to me tomorrow and quoting me that I quote, you wrong. But I would say family houses. So private family funds and houses, private company or corporate money allocated for the purpose of funding. That is a second. So it’s not very common. It’s not easy to get hold of it.

 Normally something which is very exclusive and it can only be available to people who are really desperate can’t get money from the market from their own bank. Next level, up or down. I would say billion companies are classically, very commercial, very quick in processing, but obviously equally very aggressive in their collections. It’s a big risk to take and you need to understand it.

What is Bridging?

A bridge loan is a type of short-term loan, typically taken out for a period of 2 weeks to 3 years pending the arrangement of larger or longer-term financing.

If you got into Bridging and don’t understand the default clauses or the style of the bridge and what has to be paid back, you can end up losing everything. So be careful!

Then after the Bridging companies come, the lowest level is the Sharks. These are loan Sharks, who will borrow money, there may be a local company and there may be an individual and there may be a local Backstreet lender who’s got the money. But his terms are very strict and his style is very aggressive. And then the lowest level is taking personal money from family or friends.

Never recommend it to be taken from people you think are friends. You don’t really know that well. Always consider that as an option. If you’ve got friends who are very close, who would be willing and happy to pay that money across and under some clear terms, and they’d be very flexible.

So these are the various parties that you use to raise finance and obtain money liquidity to pay down your debts or settle your debts can be done yourself, but it’s advisable that you take some help or support from professional companies that understand the nature of settling debt or how to talk to your lenders or your creditors.

So do that if you don’t want to make any mistakes. So having a member paid off it’s, knowing how to settle with them and have confirmation from them of that. So they don’t start charging ten years down the line. Now that we’re in the last minute, we do a short run when we have only a single person; I’m on my own so I’m lonely and keeping me nice and short the last minute.

I just want to summarize this topic. Releasing equity from your assets all revolves around the purpose of debt settlement and in certain cases, releasing equity is to acquire more assets. Either way, it’s important that all those key features that we mentioned the credit file, the loan to value on your assets, the regular review and costing and evaluation bank values and the bank terms and conditions. All these things are issues you must be looking at.

One must be aware of once you are attempting to raise finance from your assets in particularly when you’re trying to settle your debts. Thank you. And I will speak to you next week. Monday.