A new type of secured loan
By Peter Tuvey, co-founder and managing director at Fleximize
It’s all too easy to dismiss a secured loan as business owners don’t want to explore an option that involves securitisation of their assets unless they feel they must. However, in certain circumstances it can be the ideal funding solution for a growing business, especially when it provides the same flexibility as an unsecured loan, coupled with more competitive rates. At Fleximize, we’re offering just that and we’re keen to help brokers take full advantage.
Since launching in 2014, Fleximize has lent over £75m to companies based all over the UK, while growing the team to 45 employees. In late 2016, we introduced a product that would see Fleximize shift on to the edge of the secured loans market. Our take on a ‘semi-secured’ loan meant we’d increase our lending versatility without lengthening the funding process.
So, what makes it unique?
The secured element doesn’t extend the time it takes to lend. We utilise desktop valuations and rely on equitable charges instead of a full legal charge, and by doing so the entire lending process can be completed in a matter of days, not weeks.
Most secured loans come with hefty early repayment penalties, LTV restrictions and are generally less flexible than their unsecured counterparts. Our secured business loan, on the other hand, is just as flexible as the unsecured loan, allowing businesses to settle their loan at any time without penalty and benefit from top-ups throughout the term of the loan.
• Enhanced LTVs
We can add further flexibility by offering a hybrid of our secured and unsecured loans, which can benefit from higher LTVs (even 100+) at lower rates than would be achieved on an unsecured basis.
The product in action
Here are just a few examples of the product in action.
• Debt consolidation
A large printing business based in Greater London utilised Fleximize’s secured loan to refinance three short-term high cost loans that they’d taken out in a hurry to purchase printing machinery at auction. Fleximize lent £260,000 to wrap up all their borrowing over a 36-month loan term at a lower interest rate, saving around £15,000 per month in cashflow.
• Management buyout
Fleximize co-funded a large buyout of a construction company based in London. The other funder took security from the debt book and Fleximize took security over the property, so the loans were not conflicting. Due to the way that Fleximize combines its unsecured and secured offering, we were able to fund this loan at 120% LTV and it was this flexibility that enabled the customer to raise the level of funding required to complete his purchase.
• Acting bridge
The secured loan can work well as a bridging alternative. Several property development companies have utilised the product when they’ve required working capital at a manageable monthly cost to help with improvements to newly-purchased properties. The secured loan can be set across a longer term at a lower rate to ensure the loan remains affordable, and provides the customer with flexibility to repay early on the sale of those properties at no extra cost, treating it like a bridging loan.
To encourage brokers to explore this product, Fleximize is offering brokers a £400 gift card (of your choice) for every secured business loan funded in July and August 2018.