Secured loans to fund Fit-Outs

Secured loans to fund fit-outs

In a hard lending environment, prospective borrowers are increasingly being asked for security to support funding applications. These can be for fit-out projects, particularly in sectors that might be susceptible to future lockdowns, such as hotels, restaurants and leisure businesses. This is why secured loans to fund fit-outs are so important.

In lending terms ‘secured’ typically refers to charges over bricks and mortar premises, not, as some assume, to guarantors.

Fit Out Finance

In response to this, Fit Out Finance has connections with several reputable secured loan providers who can offer facilities supported by first, second or third charges against freehold or long-leasehold premises, whether those premises are commercial or residential. This will allow you to use secured loans to fund fit-outs easily.

With the added security of charges over property, lenders will be more relaxed over other transaction terms. Therefore they will be able to offer much more flexibility against conventional equipment leasing facilities. With security, we can offer facilities over periods up to 10 years rather than the usual 5-year maximum. In a recent case, our client benefitted from a 6-month payment holiday at the start of the agreement. They can earn money before they start to make monthly payments.

Improving relationships

Additionally pre-payments and staged payments than on a normal leasing transaction. These are things that can improve your relationship and terms with your chosen fit-out contractor or selected trades.

To suit your tax and accounting requirements, the transactions is documented as a loan or a lease agreement. Restricted by the nature of the equipment or the number of suppliers, this affects such transactions. 

Properties acceptable as security include the main residence, rental properties (either individual or portfolios) or commercial properties. In some cases, we are also able to consider non-bricks and mortar assets as security. This includes classic vehicles, boats or share portfolios. The key criterion is that it can be professionally valued, and it is possible to put a charge on it.

Commercial vs Residential

On another note, you need to give thought to putting residential property up as security when that property is the family home. For our part, Fit Out Finance takes this seriously. So much so that we will suggest that you take professional advice from a recognised legal practitioner before committing to a transaction. We will never rush or push you into signing. We respect the need for careful consideration before entering into a secured finance transaction.

For businesses that own their premises, it makes sense for the charge to be over those commercial premises. Alternatively, charges can be over multiple investment properties in a portfolio. Thus leaving the all-important family home out of the equation.

Contact Us

The majority of our business is likely to remain as conventional unsecured lease, loan or hire purchase. Alternatively, the availability of good, professional secured loan facilities. This means that fit out finance can be available in circumstances where normal agreements won’t work. For more information, call 01494 422 614 or email [email protected].