Short-term finance brings tax benefits
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Roger Morris business development manager Affirmative Finance
As the world changes opportunities present themselves and innovativewaysof diversifying and expanding your offering are usually present if you look hard enough.
In a world where lenders’ criteria seem to be tightening faster than LTVs are falling brokers sometimes need to think laterally to resolve clients’ problems.
For example, take a client who has a self-assessment tax bill that needs to be paid in January and therefore has to come up with a large amount of money that their savings will not cover.
The client has a significant amount of equity locked up in their home and has decided that they want to raise capital against their mortgage to consolidate their debt.
This allows them to get their finances up-to-date and saves them being forced to repay revenue over six months or more, as would be the case with a County Court judgment or bankruptcy proceedings.
But regardless of LTV or affordability many lenders do not allow capital-raising of any amount for tax reasons.
On the other hand, short-term lending does allow capital raising for such reasons, providing clients with a lifeline while bridging the criteria gap. And a remortgage can be applied for when the pressure is off.
Think how many accountants would love to hear from you this January. How many new customers could this offering provide you with? And don’t forget - there are two loans to be arranged for every deal.
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