Lending criteria

We lend to borrowers with experience and a clear credit history. You'll also need to be able to supply robust financial information or demonstrate a strong financial track record.

Information required

  • Three full years' audited or certified accounts plus current management figures (if produced)
  • Two months' bank statements*
  • Assets and liabilities statement
  • For business purchases and capital raising, we may ask for cashflow projections and business plans
  • Last three months' payslips and latest P60 (employees only)

 Credit history

  • Clean credit history
  • A maximum of five County Court Judgements (CCJ), within the last 60 months will be considered
  • If the CCJs total less than £1,000, were registered more than 12 months apart and they are recorded as being either set aside or satisfied then no explanation is required
  • If the total value of the CCJs is greater than £1,000 but less than £5,000, or where more than 3 of them were recorded within a 12 month timeframe then a satisfactory explanation is required
  • Where there are outstanding CCJs of any value a satisfactory explanation is required and should be settled prior to completion
  • There should be no history of any bankruptcy within the last three years. Where the bankruptcy occurred prior to this a full explanation should be obtained along with evidence of satisfactory credit conduct since
  • There should be no evidence of missed mortgage or secured loan payments within the last 36 months, save where it can be evidenced that the missed payments are due to exceptional circumstances and the lending submission noted as such
  • There should be no history of directorships of liquidated/wound up companies within the last three years, unless a satisfactory explanation can be provided.  Where the business failure occurred prior to this an explanation of the events may be requested and there should be evidence of satisfactory credit conduct since

Covers and guarantees

  • Corporate lending must normally be supported by a Personal Guarantee
  • The Bank uses Debt Service Cover Ratio (DSCR) to determine whether or not there is sufficient money coming into the business/investment to service its borrowings
  • Every lender needs to calculate whether a borrower can afford their mortgage in the long term, to account for times when interest rates rise or income might become a bit thin

 Residential investments

  • The rate the customer pays is loaded by 3.75% and gross rents have to match or be greater than the costs of the loan; i.e. pay rate + 3.75% x 100%
  • Where the property is an House in Multiple Occupation (HMO) the loading is increased to 4.75%; i.e. Pay rate + 4.75% x 100%
  • Where the applicant is a professional investor (defined as having held at least 3 investment properties for a minimum of 2 years) this test is against the interest-only costs. Otherwise, the test is against the capital and interest costs assuming a mortgage term of 20 years

 Owner occupier loans

The rate the customer pays is loaded by 3.75% and reconstituted profits have to match or be greater than the capital and interest loan costs over a 20 year term.

 

*We may ask for a longer period of Bank Statements if there are any concerns regarding cashflow.

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