Question 1

Second Charge Mortgages

Accepted Answer

A “normal” mortgage is also known as a “First Charge Mortgage”. Which means that when the property was sold or in some cases repossessed, that lender will get their money first.
 
A “Second Charge Mortgage” is exactly what it says on the tin. Another loan that sits behind the first loan and may be used by someone as they need to raise additional finance but could incur early repayment charges on their normal mortgage. This may be a situation many want to avoid.
 
Or maybe they cannot raise the finance through a conventional mortgage so in some cases a second charge mortgage could achieve those needs.

The interest rates are typically higher than what can be found on a normal mortgage, but the advantage of working with Cambridgeshire Money is that we compare all types of finance to achieve your goals.

Question 2

Bridging Finance

Accepted Answer

A bridging loan is intended for short term lending and can be used for a number of purposes, some common examples we see;
 • Buying a new home before you have been able to sell yours or if the transaction has fallen through and you do not want to restart your home searc
 • Buying a property at Auction
 • Lending against a property that a normal mortgage lender would not lend on. Such as a property that needs a renovation or does not have a working bathroom or kitchen
The set-up of these loans and the way the payments are made can be different to what you would expect on more conventional lending.
 
Speaking to an expert like us can make sure you fully understand the product in relation to your needs and get the best deal for your circumstances.

Question 3

Self-Build Mortgages

Accepted Answer

For some, Home Ownership is not enough. Some people have the dream of building their own home. Funding this dream can be difficult and unconventional. This is where a Self-Build Mortgage could help you achieve your own Grand Design.

Every project is different and bespoke to the individuals plans. Speaking to an adviser can ensure that you get the best lender and deal for you and your project to keep the build on track and the financing of the project seamless from start to finish.

Question 4

Development Finance

Accepted Answer

Development Finance is a type of finance used to fund the purchase, construction, conversion or heavy refurbishment of properties. Most loans are considered short term and meant for use during the build and then repaid by the sale of the property/properties or refinanced with a different product later.

Lenders in this type of finance work differently to normal finance. The lender will consider the value of the property now, before the works being carried out, as well as the value on completion. This is to determine if the development finance is the best product to be
considered for your project.

You can expect to achieve 55% to 65% loan to value on the current value (pre-renovation) with a Maximum LTGDV in the region of 60-65% with a max Loan to Cost (LTC). This varies between lenders, but 65% is not an unrealistic expectation.
If you have a Development Finance enquiry, then get in touch and we
can talk through all of this with you and find a lender to suit your
development needs.

Question 5

Commercial Mortgages

Accepted Answer

A commercial mortgage is remarkably like a Residential Mortgage, but the key difference is what the loan will be secured against. As opposed to being on a residential address, like a house, it would be secured against a commercial property such as a Shop, Restaurant or in some cases Land.

This type of loan may be used by a company wanting to own their own premises or from investors that prefer to own properties rented to businesses as opposed to families.
 
Whatever your Commercial Mortgage needs are, get in touch today and we can talk you through the best options for your circumstances

Question 6

Invoice Finance

Accepted Answer

Invoice Finance is a commercial finance product which is used to release funds to a business that has outstanding invoices which can be used as security.
 
This can be a highly flexible form of borrowing which can be used to free up funds from your debtor book, relieving the pressure placed on your cash flow.

Many businesses are turning to this option to take back control of their finances, allowing them the breathing space needed to move forward. 
 
If you want to discuss if this is an option for your business, then get in touch with us today and we can see if we can find something to suit your business needs.

Question 7

Asset Finance

Accepted Answer

Asset finance is a type of lending that gives you access to business assets such as equipment, machinery and vehicles. It enables you to release cash from the value in assets you already own.
 
Asset finance includes:
 • Leasing Equipment
 • Hire purchase
 • Finance leases
 • Operating leases
 • Asset refinance
Asset finance is a broad category that relates to valuable items in your business. Generally speaking, there are two types of asset finance; 
 
Lending secured against existing assets
Equipment finance to get additional assets.
 
An ‘asset’ can be almost anything, whether it is ovens and refrigeration for a catering company or a haulage firm’s fleet of vehicles. With a wide choice of alternative lenders
across the market, you can find asset finance for almost anything.
 
Paying cash up front for brand new equipment or machinery can be expensive and could be a risky move that causes cash flow problems.

Some companies simply don’t have the working capital for a big purchase. That is where
equipment finance comes in.

Question 8

Hire Purchase

Accepted Answer

Hire purchase is a simple way to purchase an asset and spread the cost over time. You pay in instalments, which means the item appears on your balance sheet and because you own the asset you will be responsible for the maintenance and insurance costs. You will also have
full ownership of the item after the term ends.

Question 9

Equipment Leasing

Accepted Answer

The lender buys the asset you need and rents it to you on a lease. That means you have it straight away and you will only need a fraction of the total amount up front. Generally, you must pay the first month’s rent, spreading the VAT over the whole period.
 
At the end of the lease, you can either continue leasing the item, buy it outright at an agreed price (factoring in money already spent), upgrade to a new piece of equipment on a new lease, or simply return it.

Many businesses find leasing a good arrangement because as well as spreading the cost over time, you can adapt to your company’s situation.

For example, say a delivery company leases a van, and at the end of the term business is booming. They could get a larger vehicle on a new lease or a package deal for multiple vehicles.

Question 10

Finance leases and capital leases

Accepted Answer

A finance lease or capital lease falls somewhere between hire purchase and equipment leasing. It is a longer-term lease designed for most of the asset's life.
 
You get full use of the asset and pay for the full value over time, but do not technically own it. Meaning that it does not appear on your balance sheet. That means it is possible to offset rental costs against profit and claim VAT which could be tax-efficient depending on your situation.

Question 11

Operating leases and contract hire

Accepted Answer

Operating leases or contract hires are a more familiar form of equipment leasing. An operating lease is basically a rental agreement with a set term. Maintenance will normally be handled by the lease company (or & lessor. Like finance leases, an operating lease will not appear on your balance sheet (which might offer some tax benefits), but operating leases can be cheaper because you do not pay for the full value of the item.

Question 12

Asset refinancing

Accepted Answer

Asset refinancing is the process of securing a loan against valuable items that your business owns such as buildings, vehicles, or equipment.
If you cannot keep up payments on the loan, the lender will take the asset to recoup what is owed.
 
Because you are effectively ‘unlocking’ cash, the amount you can borrow depends on the value of the assets involved. Asset-backed lending is sometimes used for debt consolidation
Some lenders specialise in one particular area of asset refinance, while others can finance almost anything that has a resale value.
 
There is a wide range of asset finance products available and it can be a very flexible arrangement. However, there are a few restrictions: usually the asset must be critical to your operations and it must also be removable
so it can be taken as security for the loan.

Specialist & Commercial Finance

Some types of lending are a little more specialist and require expert advice.

For this reason, we decided to set up Cambridgeshire Commercial Money. A specialist division designed to ensure you always get expert simple, smart advice no matter what your finance needs are.