Build it
Build it
Development finance
Ground-up, conversion and part-built schemes, from site purchase to exit.
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Development finance
Which cap binds, loan to cost or loan to GDV, and the real day-one equity.
Build to Rent development
Underwritten on stabilised yield and DSCR, not sales rate.
Mezzanine and stretched senior
The gap between senior LTC and what you can fund, and the true blended cost.
Heavy refurbishment and conversion
Where refurbishment stops being a bridge: structure, change of use, drawdowns.
Part-built and rescue finance
Valuing an unfinished asset when the contractor has gone.
Bridge it
Bridge it
Bridging finance
Short-term debt where the deadline, the asset or the exit will not wait.
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Purchase bridge
Completing before the money is in place: chain breaks, tight deadlines, unmortgageable stock.
Development exit finance
Off development debt at a lower rate, to buy sales time and release equity.
Auction finance
A 28-day clock, and what must be in place before the hammer falls.
Pre-planning and planning gain
Lending against current value with planning upside.
Below market value purchase
Day-one lending against open market value rather than price.
Second charge and capital raising
Raising against existing assets, and first-charge consent.
Light refurbishment finance
Bridge plus refurb tranche, and where the development boundary sits.
Also structuredBridge to let and refinance
Hold it
Hold it
Mortgages and term finance
Long-term debt against income, once the asset is built, let or trading.
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Buy to let mortgages
ICR stress testing, limited company against personal, portfolio rules.
HMO mortgages
A higher cover test, licensing, and the two valuations a lender takes the lower of.
Commercial term, investment
Tenant covenant and lease term, and why DSCR sets the loan.
Commercial term, owner-occupier
Trading accounts and EBITDA rather than rent roll.
Portfolio refinance
Cross-collateralisation, and one facility against individual loans.
Stabilisation and term refinance
The income test replacing the GDV test, and the letting void before term debt engages.
Co-living and PBSA
An operational asset valued on income, and the operator covenant.
Run it
Run it
Business finance
Funding the business behind the property, secured on the ledger, the equipment or the covenant.
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How we work
Case studies
Articles
Tools
Development finance calculator
Size the facility against site cost, build cost and GDV.
Development exit calculator
Refinance the development facility and release equity at PC.
Bridging finance calculator
What a bridge costs, and what actually clears on day one.
Refurbishment finance calculator
Fund the purchase and 100% of the works, with interest rolled to exit.
BTL rental cover calculator
The rent a buy to let must achieve to clear a lender's cover test.
Commercial mortgage calculator
What a commercial property's income will support, and what it costs.
About
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Bridge it › Second charge and capital raising
Equity tied up in a property you already own is the cheapest capital you have and the hardest to reach. Refinancing the whole asset to release some of it means breaking a facility that may be well priced, may carry an early repayment charge, and may not be replaceable on the same terms today.
A second charge sits behind the existing lender instead. The first facility is left alone and the new lender takes a subordinate position, which is why second charges price above first charges and why they are a small part of the market.
The constraint is rarely the value in the asset. It is consent. The first lender has to permit a second charge, and many facilities either prohibit it outright or make it discretionary. Establishing that before anything else is what stops the exercise being wasted.
Price the raise before you ask the first lender for consent.
First lender consent established first
Before valuation, before legals, before anything is paid for. A deed of priority the senior lender will not sign is the end of the transaction, and it is a question that can be answered in a phone call.
Compared against a full refinance
Sometimes replacing the whole facility is cheaper than adding to it, particularly where the existing rate is above market. We price both rather than assuming the second charge is the answer because it was the question.
Combined leverage, not just the new slice
The lender tests the first and second charge together against value. A comfortable second charge behind a stretched first is not a comfortable position, and the combined number is the one that gets underwritten.
A purpose and an exit that hold up
Capital raised for a specific, evidenced use prices better than capital raised generally. And a second charge is short-dated, so how it gets repaid matters as much as what it funds.
Which lenders play here
Unregulated bridging lenders who will take a second charge, which is a minority of the market. Pricing sits above equivalent first charge lending, and appetite varies sharply with what sits in front and how much of the value is already used.
10%
Of bridging market, second charge
65-75%
Combined LTV, typical
Combined
Both charges tested against value
Consent
From the first lender, required
Indicative, and not an offer. What a lender will actually do depends on the scheme, the borrower and a full valuation.
What to have ready
Bring these and we can tell you where you stand.
Each one is something a lender will ask for. Having it early is the difference between a fast answer and a slow one.
✓The asset, its current value, and evidence for it
✓The first charge: lender, balance, rate, expiry and any early repayment charge
✓Whether the first lender permits a second charge, in writing if possible
✓What the money is for, specifically, with costings
✓Your exit, and its timing against the first facility's expiry
✓Rental income or trading figures where the asset produces either
Related case study
£11m Cross-Collateralised Against Two Near Complete Residential Schemes
Related
Worth reading on this
Article
How Bridging Works: Term, Interest and the Exit
Article
What is Heavy Refurbishment Finance and When Does it Become More Than a Refurb?
Article
How to Finance a Development Site Acquisition
Next
Related in this pillar.
Common questions
The questions this product raises.
What is a second charge loan?
A loan secured behind your existing lender, so the first facility is left alone. You raise equity without breaking a loan that may be well priced or carry an early repayment charge. It can be secured on investment or commercial property, or on your home where the money is for business purposes.
Do I need my first lender's permission for a second charge?
Yes, and it is the first thing to check. The first lender has to consent and sign a deed of priority, and many facilities either prohibit a second charge or leave it to the lender's discretion. Find out before anything is paid for, because a refusal ends the transaction.
How much can I raise on a second charge?
The lender tests the first and second charge together against value, typically 65 to 75% combined. A comfortable second charge behind a stretched first loan is not a comfortable position, and the combined figure is the one that gets underwritten.
Is a second charge cheaper than refinancing the whole property?
Not always. Second charges price above first charges, and where your existing rate is above market, replacing the whole facility can cost less. Price both. A second charge is also short-dated, so how it gets repaid matters as much as what it funds.
Bring us the detail.
Send what you have. We will tell you what is fundable and what needs work before anyone approaches a lender.
Specialist property finance for developers who want the numbers to survive underwriting.
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Fundingwise Limited is not authorised or regulated by the Financial Conduct Authority, and arranges unregulated finance only. That means lending secured against commercial property, or against residential property that is not, and will not be, occupied by the borrower or an immediate family member as a main residence. We do not advise on or arrange regulated mortgage contracts or regulated bridging loans. Because this finance is unregulated, FCA conduct rules and access to the Financial Ombudsman Service do not apply. Fundingwise Limited is registered in England and Wales, company number 13750788.