News

Adverse Accepted.

In what has been a challenging period for many, it’s good to see multiple lenders seeking to support clients where there may be adverse. In the bridging loan and short-term structured debt market, and across term loan options, adverse situations may not be the deal breaker that some may think. The Omega team are vastly experienced at structuring positive client outcomes, and in more recent times that includes examples where existing debt terms have expired, CCJs are noted in the background or clients have missed payments.

The term non-status loan is often associated with borrowers who fall outside traditional lending criteria, but to an extent it describes the way some lenders assess risk and are more tunnel focused on the asset. This is where our established relationships with a range of lenders come into play. These somewhat more specialist lenders are typically focused on the strength of the asset, cashflow over the term of their exposure and where it’s a short term arrangement, most importantly the proposed exit strategy.

As a result, adverse credit is frequently viewed as just one component of the overall transaction rather than an automatic reason for decline. These facts are established in early discussion with our introducing partners and clients so we can discuss genuine real terms available, and present to lenders we know can assist with a thorough proposition.

Adverse Credit Is Not the Barrier Many Borrowers Expect

One of the most common misconceptions among borrowers is that historic credit issues prevent access to property finance. In our experience however, many bridging and short-term structured debt lenders will consider cases involving:

• CCJs and defaults
• Missed mortgage payments
• Expired term loan sin default
• Historic IVAs or bankruptcy
• Debt management arrangements
• Credit profile deterioration linked to business or property activity

For experienced specialist lenders, understanding the circumstances behind adverse credit is often more important than the event itself.

Non-Status Bridging

In the bridging market, underwriting is typically transaction-led rather than score-led. To access certain lenders, yes a strong credit profile helps or is even a pre-requisite but with the exponential growth of the bridging and short term market, the number of lenders who consider the client credit profile in the round, are growing.

Where there is a clear exit and sufficient security, adverse credit can often be accommodated by lenders who specialise in non-status and complex property transactions.

A Growing Feature of the Specialist Finance Market

The reality is that many successful property investors, developers and business owners encounter credit issues during their careers. Specialist lenders recognise this and often take a more commercial common-sense view than mainstream institutions.

For our clients and introducing partners, this creates opportunities to secure funding solutions that may initially appear unrealistic. Access to the right lender is critical, as appetite for adverse credit varies significantly across the market.

Helping Non-Status clients

A non-status bridging loan should not be viewed as a niche product solely for distressed borrowers. It represents a significant part of the modern specialist finance market, where deals are assessed on their commercial merits rather than purely on credit scores.

For borrowers with adverse credit, strong security and a credible exit strategy, bridging finance remains a viable and often highly effective funding solution.

Even where a term loan is sought, and say CCJ appear in the background, this needn’t be the stumbling block many believe it to be. It’s essential to speak to a member of the team and establish the extent of the adverse as part of the full underwrite. In many cases, the adverse history that appears problematic at first glance is far less important to specialist lenders than the quality of the transaction itself.

We can help build a strong proposition for your clients and ensure they can access a deal that suits their needs. Contact us today 0333 6000 007.