Five things to be aware of when securing refurbishment finance

By Bridging Loan Directory -


Karen BennettIf you are a broker who has noticed an upturn in refurbishment finance queries, you are by no means alone.  The cost of this type of finance has been driven down recently, which has meant the number of property investors now looking at short term loan (STL) products for refurbishment to help grow their portfolio are increasing.  The access to an alternative source of funds, other than their own cash reserves, helps experienced investors take advantage of time-sensitive opportunities in the market.  Demand is high and as a specialist lender in the commercial market, we offer a breadth of options to help investors secure refurbishment funding.

The refurbishment products we offer are specifically tailored for residential and mixed use light refurbishment.  These products can help property professionals resolve a temporary cash flow situation, or ensure their cash isn’t all tied into the property, allowing them to complete decorative refurbishment work prior to their property being sold or rented.  We offer short term finance options or a 3/5 year product giving brokers and their clients the flexibility to choose a product that works for their current situation.

An increase in specialist lenders like Shawbrook has helped to boost the market, and it is clear that brokers have options to help their clients raise much needed finance.  There are five key points which they should consider prior to approaching a lender.  Being aware of these will increase the likelihood of clients getting the positive decision they desire before a deal is confirmed.

Market Knowledge

A thorough knowledge of the market is of vital importance, so make sure your client has done their research.  An understanding of rental or resale prices is essential.  If your client wants to use a refurbishment product are they fully aware of the impact it will have on the property?  Investor clients will always look to add returns to an investment, but undertaking work on an HMO in an area which doesn’t have large numbers of students or single people may prove to be a mistake, for example.

Realistic Value

Is the value your client expects realistic? Take the time to really get under the skin of rental demands and property prices.  If brokers approach a lender with an unrealistic property valuation it could see the potential deal falter at the first hurdle.  Make sure this doesn’t hinder your ability to complete deals while the client loses out on funding.  It’s better to complete a business case with an accurate price, than present an overvalued case which fails to materialise into funding.

Local Area

An understanding of the region is another key issue. If you are not local to the area, why not take the time to visit the site?  We know brokers are busy, so if this is not possible why not consider using technology to reduce the time implications?  A number of online programmes will show you detailed street maps, while internet resources can give a real insight into the local area and its amenities.


Brokers should have a full knowledge of their client’s contingency plans. In particular, being aware of their long term plans is extremely important. Some investors will look to purchase their next property following refurbishment on others in their portfolio. This allows capital to be raised as they await the property being sold.


Sourcing finance is the last and final hurdle.  Short term finance solves the immediate need and offers a good opportunity for brokers to see repeat business. There is often an exit to facilitate those investors holding onto properties for investment, or those looking to move onto their next project which they will require finance for.  Brokers can work with specialist lenders, like Shawbrook, for term finance, specialist BTL and STL cases.

It’s an exciting time for brokers working in the refurbishment market. Making sure all these areas are covered prior to submitting a case to a lender will greatly improve the chances of your case being accepted.

Karen Bennett, Director of Sales and Marketing, Commercial Mortgages, Shawbrook Bank