Bridging finance provider, SoMo, has hailed its recent campaign educating brokers about the benefits of second charge and equitable loans as a success, following a 63% rise in enquiries about second charge loans from brokers during April.
Louis Alexander, CEO at SoMo, said: “With the cost-of-living crisis effecting everyone, businesses and individuals alike, we wanted to raise awareness of – and uses for – our second charge and equitable charge loans. Over 25% of first charge lenders do not approve the second charge consent but as we don’t require consent from the first charge lender, it gives SoMo an increased acceptance rate of clients. We accept this risk and for this reason, we’re very successful in this area.
“If you’re a broker and you’re using a bridging lender for second charge loans, you should only ever use one that allows for refused consent. So many cases stall or fail entirely at this stage, you really are looking after your clients’ best interests by choosing a lender that offers this.”
Second charge now makes up over 50% of all SoMo loans, which many businesses use for working capital, to refinance Coronavirus Business Interruption Loan Scheme loans, pay staff or fund new ventures and opportunities.
Alexander added: “SoMo has focussed on second charge lending from the very beginning, and it comes as no surprise to us that the market is growing. Unlike traditional banks, commercial lending means that funds can be with the applicant within a matter of weeks. If commercial finance brokers really understood the power and ease of bridging loans versus commercial finance packages, then they would be able to help their clients far simpler and quicker.
“We’re finding brokers, intermediaries and clients are turning to SoMo because we’re able to offer a specialist and solution-based approach to second charge lending, a leading LTV of 70% against the
OMV and rates from 0.6% pcm.”
