FAQs: CA Property Finance

CA’s finance products can be used for a multitude of purposes. Commercial Acceptances provide short-term bridging finance, development loans and medium-term investment loans to professional property traders, investors and developers to include private individuals, partnerships and limited companies. Loans can be secured against residential property, commercial property or land.

We lend to established and experienced property developers, traders and investors of residential and commercial property, to include private individuals, partnerships and limited companies.

We do not lend to owner-occupiers or properties where the applicant or a family member does or will reside in the property.

We will need to determine the following to check if our funding is suitable for you:

• The credit profile of the prospective borrower
• The viability of the project
• The applicants’ previous experience.
• The type of asset
• The location of the property
• The exit strategy
• The equity contribution
• The identity of the tenant/s and lease terms, if applicable
• If the applicant or a family member resides or plans to live in the property to be offered as security, we will be unable to assist.

• The purchase of properties which have potential for future development. CA has bespoke development products should planning be granted and funding is then required to develop the property.
• Auction purchases. You can contact CA before the auction. Our experienced Lending Managers can offer you a quick decision in principle and provide you with Heads of Terms prior to the auction.
• Properties that need refurbishment or redevelopment prior to onward sale or to be retained as an investment once they have been renovated.
• Properties that are already owned and capital is required, to repay another lender, for a lease extension, or to provide funds for further investments.
• Properties/land with planning permission for a residential or mixed use development scheme.
• The purchase of commercial property subject to meeting CA criteria.
• CA has a suite of medium term products designed for income producing assets.
• CA has a Flex product which can incorporate the benefits of bridging loans, development loans and medium term loans. We can fund the purchase and development of a property which can then be converted to a medium term loan.

CA’s bridging loans can be used to assist with the purchase of individual or multiple units to build a portfolio or CA will finance entire portfolios or individual properties within existing portfolios to raise capital and/or refinance existing borrowings. CA’s medium-term loans may offer an alternative option in such cases.

Once we have had an opportunity to consider the application and are satisfied that the requirement satisfies our lending criteria, we will provide you with a decision in principle via our Heads of Terms. We know that time is of the essence and enjoy many decades of experience funding auction purchases, so we get matters moving quickly.

1. Initial application and Heads of Terms
   To get the ball rolling, either pick up the phone and talk to one of our lenders (020 3857 6350) or email us at info@acceptances.co.uk. If your requirement satisfies our lending criteria, we will provide you with a decision in principle via our Heads of Terms. If you are happy with the Heads of Terms and wish to proceed, we will send you our account opening documentation. Once these forms are returned, together with any other information we have requested, we will progress your application. We always undertake due diligence and KYC on all parties to the loan which must be satisfactory.

2. Credit approval and offer
   We then instruct one of our panel valuers to inspect the property and to provide a formal valuation report. In most cases, we simultaneously appoint one of our panel solicitors. They will immediately contact your solicitor requesting responses to a list of Standard Mortgage enquiries together with a cost undertaking. You will be responsible for both the valuers and solicitors fees plus VAT. These fees will be detailed in the Heads of Terms. If the valuation report is satisfactory, we will prepare and submit a formal application to CA’s internal Credit department. Once formally approved, the team will issue an offer letter. We will remain in continual contact with our solicitor and will provide the applicant with regular updates until the loan is completed.

3. Releasing funds
   Once we are satisfied with our solicitor’s report and all conditions attaching to the loan, funds will be drawn according to the terms set out in the offer letter.

Our bridging loans are ideal for purchasing properties quickly on the open market, at auction, refinancing, or for the light refurbishment of residential, semi-commercial and commercial assets.

Development loans are offered to experienced developers, builders and property development companies for new build projects, conversions, and refurbishments. We structure the loan facility to cover all construction costs, infrastructure, services, professional fees and interest.

CA’s bridging loans do not attract commitment or redemption fees. CA’s development loans are structured differently to include commitment and redemption fees. Interest rates for both products differ and will be fully disclosed in CA’s Heads of Terms. In some cases and in particular smaller development projects, both bridging or development finance might be suitable. In these cases, we will provide Heads of Terms for both products allowing the applicant to determine which product best suits their requirement.

You will need to be an experienced property developer and demonstrate that you have commensurate experience. You will need to provide full details of the project. This might include:

• The purchase price or current value of the property
• A full breakdown of the development costs
• Expected end value (GDV)
• A workflow schedule (schedule of works and build stages)
• A CV detailing past commensurate experience
• Details of your likely professional team (contractor, structural engineer, architect etc.)
• Planning permission/application
• Exit strategy (sale or retention as an investment.

If the application is for a tenanted residential or commercial property, we will require the following information:

• Property income
• Length, unexpired term and type of the occupational lease/s
• Additionally, for commercial properties, the covenant of the tenant/s

We can also lend on vacant commercial property. However, it will need to meet one of the two criteria set out below:

• the commercial property is being retained for commercial use, and we are satisfied with the demand for the property and that the existing use is viable.
• you are buying the commercial property and intend to seek planning consent to convert the property to residential. Underwriting will be on the basis of the existing use of the property notwithstanding the intention to change us. Our valuer must confirm that the ongoing use of the commercial property is viable and that there will be a good demand from both investors and occupiers should planning for the proposed scheme not be granted.

We do offer longer-term loans. We provide longer-term Investment loans up to five years secured against income-producing residential, commercial and semi-commercial property. We also offer products that combine our bridging and development loans with our longer-term products.

The loan is secured by way of a first charge over the property. If the borrower is a company, we will need a debenture and personal guarantees.

We lend from £50,000 to £5 million, depending on the value of the property offered as security and the finance option you require.  Larger loans are available by exception.

We lend up to 70% of the 180-day market value of the property or 60% of the Gross Development Value (GDV) for a development. We can lend up to 65% of GDV if the total build costs are less than £500,000.