Trying in vain to borrow 25k

Splatt

Hi All,
In order to develop my business I have been looking to raise 25k.
I have phoned 3 specialist mortgage brokers with the idea of re mortgaging a property to raise the funds. All of them have said that I won't get approved.

The background is that I live in Spain, have a house here with plenty equity and another house that is paid in full. I also own outright a shop and flat in the UK. I checked my credit score with experian and it's 962. The problem is that as I am self employed I don't have proof of significant income from my business, I want it to grow.
I have income from property but apparently that's no good.

So with equity in the region of 650k and I want to borrow 25, quite happy to secure the debt, I am too risky.

Is this where we are up to with the banks these days?

Cheers in advance for any replies.

S.

zxspeccy

Hi,
I think the issue may be around "the ability to repay", a Bank has to satisfy itself that you will be able to comfortable meet the repayments. The security (mortgage) taken is just in case you are unable to repay, and should only be pursued as a last resort. Bank can not lend purely on the strength on the security on offer.

It is not clear in your post whether your business is operating in the UK or Spain. In addition why are you approaching Mortgage Brokers? Do you have a Business Bank account (where your cashflow/turnover has been going through) and a Business Manager at the Bank you can speak to? Providing you have put together a suitable business plan (including historic accounts, budget planners and cashflow forecasts), then Banks out there do have money to lend, it is just that they need to lend it responsibly.

Brock_and_Roll

As a banker myself I suspect the very mention of the word "Spain" is enough to make them all run a mile.

As the other posters have said, it is an ability to pay problem. Sure you could keep Spain out of it and just say, raise a mortgage against the UK flat, but the problem is the lender is going to want to know how you are going to repay the loan - and you can't provide this.

Lateral thinking here - you are asset rich, cash poor. Could you not sell the flat?

poppasmurf_bewdley

I would suggest that you contact a professional advisor in this matter. You cannot seriously expect a forum like this to provide answers to questions regarding a £650k portfolio.

Splatt

Thanks for the replies so far. The UK property is tenanted and I was hoping that this would be enough to show sufficient UK income to repay the loan.
I guess I was looking for recommendations for UK lenders in the Buy to Let or Self Certification categories.

The business is in Spain and although I have broached the subject with my Spanish bank I would rather not borrow off them as the negative press surrounding Spanish banks makes me think that I would be as secure borrowing the money off 'Mickey the hammer' who operates from behind the pub.

I am in the process of putting a Spanish property on the market but that could take a while to sell.

If it seems infeasible to use a UK lender I suppose my only option is here. As long as I can sell my property and get the cash back into Sterling, then I suppose it will make the repayments cheaper in future when I am repaying a devalued peseta!

Thanks,

S.

poppasmurf_bewdley

Splatt wrote: »

Thanks for the replies so far. The UK property is tenanted and I was hoping that this would be enough to show sufficient UK income to repay the loan.
I guess I was looking for recommendations for UK lenders in the Buy to Let or Self Certification categories.

The business is in Spain and although I have broached the subject with my Spanish bank I would rather not borrow off them as the negative press surrounding Spanish banks makes me think that I would be as secure borrowing the money off 'Mickey the hammer' who operates from behind the pub.

I am in the process of putting a Spanish property on the market but that could take a while to sell.

If it seems infeasible to use a UK lender I suppose my only option is here. As long as I can sell my property and get the cash back into Sterling, then I suppose it will make the repayments cheaper in future when I am repaying a devalued peseta!

Thanks,

S.

In the part of Spain where you live, haven't they gone over to the Euro yet. The Peseta went out of use in the rest of Spain in 2002!
:eek:

Splatt

My attempt at Economic humour. The Euro isn't well!