The Loan Note will be secured against all of the underlying assets of the Company, including:
All of the secured Registered Charges at Her Majesties Land Registry on all Properties where Bridge Finance has been provided,
All income sources and streams,
All cash reserves
The Companies various security classes as above are completely captured by way of a floating debenture against the Company. This is a legal document which enables a secured charge to be taken over the Company's multiple assets. This floating debenture will be immediately registered at UK Companies House to secure and protect a Loan Note Purchaser.
Immediately following registration of your debenture security interest at UK Companies House you will be provided with all of the details including the link to UK Companies House website so that you can independently verify your registered security interest.
The UK has some of the strictest corporate laws and governance anywhere in the World. UK Companies House is a Government Department which acts and strictly enforces these Laws in the best interests of the Public.
Therefore the debenture security interest held by a Loan Note purchaser has a protective security layer. In the unlikely event of business insolvency then the sale of all of these underlying secured and unsecured assets, contribute towards paying back Loan Note Purchaser's capital.
Please note that there is no bank borrowing or other debt within the company, this means therefore, Loan Note purchasers will have priority over all of the Company's assets, which is unusual as most companies issuing Loan Notes and Bonds have borrowings from Banks or similar institutions which generally will take priority over any Loan Note or Bond holders.
For balance, Certain Bridge is obliged to refer to possible situations where the security may be insufficient to achieve full repayment and there may be a shortfall.
The company utilises multiple reference points when considering the valuation of any property(s) security that Certain Bridge lends against. Following a thorough investigation, management agree on a Valuation figure. Using this valuation figure the company then applies a very cautious maximum lending amount of 65% LTV (Loan to Value) of the property(s) used for the mortgage security. This 65% LTV includes the secured loan the company is about to create and other (if applicable) total gross amounts secured on the property(s). It is also important to note that the 65% LTV includes all of the Bridge borrowers interest payment charges and fees on the loan being provided by the Company.
Where applicable the company studies the credit reports of applicants to ensure the applicants stated method of repayment is achievable for the secured Bridge loan about to be provided. This is important if applicants have stated they will be refinancing the debt owed to Certain Bridge. Other factors including the immediate property market, is also studied to determine risks and the speed at which properties are sold in the area of the security to be taken.
Prior to making a secured mortgage offer the company also analyses, what a borrower’s balance would be 6 months after their balance was due to be repaid by calculating the monthly default interest and any legal fees. This ensures that the loan application has been underwritten with the “worst case scenario” very much at the forefront of the lending decision.
Occasionally Certain Bridge does have to take a borrower to court in the event of non-payment of the mortgage secured loan.
The Courts generally hear possession proceedings very timely however the company does understand that one day there may be an instance, when there could be a protracted litigation case with a secured borrower. This could incur months of default interest and legal fees charged to the account. In this scenario there could be the case when the property is repossessed, that the sale proceeds of the secured property may not fully discharge all of the liabilities. In this unlikely situation, the company would look to recover any other assets that the client may have through further court applications, should the company deem the recovery of any shortfall to be commercially viable.
It should be noted that the company employ a top 50 UK Law Firm to represent them in any court case. In most cases the company would ensure a Barrister represents the company in any Court Hearings. The Loan Agreement Certain Bridge has with its Borrowers ensures that all legal costs are charged against the mortgage secured properties in the event of action to recover the mortgage secured debt, and these charges are added to the defaulted borrowers balance.
It should also be noted that any property the company repossessed would have to be sold by the company (or indeed any first charge holder taking action) at a price drop of 35% on its determined value (remember max lending is 65% LTV) for the initial Gross Loan to be jeopardised, and even less for the original capital expended to be lost in part.
In the ultimate and unlikely event, that there is a shortfall to fully discharge the secured debt the company has numerous ongoing secured mortgages, and whilst it would not be welcomed by the company the company could easily absorb a shortfall in these circumstances.
Certain Bridge are of course aware of ongoing political and economic uncertainty both in the UK and worldwide; we have restricted our LTV ratios in certain areas of the Country as a precautionary measure and continue to monitor and adapt as necessary. One thing for sure though, is Certain Bridge takes security against real property assets which are ultimately not going anywhere and will always be secured until repayment.