Do I need a specialist broker to arrange a revolving credit facility, or can I go direct to a lender?

Do I need a specialist broker to arrange a revolving credit facility, or can I go direct to a lender?

For busy UK property investors and buy-to-let landlords, securing flexible funding is key to growing a portfolio. A buy-to-let (BTL) revolving credit facility works like a property overdraft, allowing you to draw down funds, repay them, and draw them down again without the need to reapply each time. Unlike an unsecured business loan or a credit card, this is a secured facility that sits as a second charge behind your existing first-charge mortgage.

When looking to set up this type of finance, you may wonder if you need to use a specialist broker or if you can simply go direct to a lender. The short answer is that while direct applications are possible for some generic commercial loans, the specialised lenders offering secured BTL revolving credit facilities almost exclusively work through intermediary networks. This means you will typically need the help of an experienced broker to access them.

Why most revolving credit lenders work through brokers

The UK property finance market contains many niche lenders. Unlike high-street banks, these specialist companies do not usually have public branches or direct customer service departments for retail borrowers. Instead, they rely on broker networks to package applications, check eligibility, and manage the initial underwriting stages.

By using a broker, lenders save time and reduce administrative costs. This allows them to offer more competitive rates and bespoke terms to property investors. To make sure you are dealing with a legitimate firm, you can check the Financial Services Register to confirm your broker is properly authorised. Promise Money, for example, is an FCA-authorised broker (Ref: 681423) and is not a lender. Our role is to find the right secured facility for your circumstances.

The benefits of using a specialist broker

If you are trying to decide between going direct or using a broker, it is helpful to look at the practical benefits a specialist broker can bring to your property business:

• Access to restricted products: Many of the leading secured revolving credit products are simply not available to the public. Brokers have direct lines to decision-makers at these exclusive lending firms.
• Understanding criteria: Lenders have strict, differing criteria regarding credit history, property types, and portfolio sizes. A broker understands which lenders are most likely to accept your application.
• Time savings: Arranging a second-charge facility requires legal checks, valuations, and coordination with your existing first-charge mortgage provider. A broker handles this paperwork on your behalf.
• Fast access to cash: Once a revolving credit facility is successfully set up, funds can typically be drawn down in as little as 24 to 48 hours when you need them.

To check your eligibility, a broker will typically look at your credit history. Get your free credit search here. It’s free for 30 days and costs £14.99 per month thereafter if you don’t cancel it. You can cancel at anytime. (Ad)

Real-world scenarios: How landlords use revolving credit

A secured revolving credit facility offers a high degree of flexibility. Landlords often use this product to bridge financial gaps instead of taking out expensive short-term loans or undergoing a full remortgage. Here are some common ways investors use this property overdraft:

• Auction purchases: If you spot a property at auction, you may only have 28 days to complete. A pre-arranged revolving credit facility allows you to draw down the deposit or full purchase price in 24 to 48 hours.
• Refurbishments and EPC upgrades: With changing energy efficiency laws, you may need to upgrade properties quickly. You can draw down funds to pay builders, complete the work, and then repay the balance once the property is revalued or re-let.
• Void period cover: If a property sits empty between tenancies, your mortgage payments are still due. You can use your facility to cover these costs and repay it once rent payments resume.

How revolving credit compares to other funding options

Historically, property investors have relied on remortgaging or bridging finance to release equity. Understanding how these alternatives differ from a secured revolving credit facility is vital before making a decision.

Remortgaging can be slow and expensive. You may have to pay early repayment charges on your current mortgage, and you will start paying interest on the entire lump sum immediately, even if you do not spend the cash straight away. With a revolving credit facility, interest is only charged on the drawn-down amount, not the total limit of the facility.

Bridging finance is another popular option, but it is typically designed for one-off transactions. Bridging loans are split into two categories: open and closed. An open bridging loan has no fixed repayment date but must typically be repaid within 12 to 24 months. A closed bridging loan has a clear, fixed exit date, such as a confirmed property sale. Most bridging loans roll up interest, meaning you do not make monthly payments, but the total debt grows quickly. A revolving credit facility, by contrast, stays open for years, allowing you to use it, repay it, and reuse it as many times as you like.

As with all secured lending, you must consider the risks. Your property may be at risk if repayments are not made. If you default on your payments, you may face legal action, repossession, increased interest rates, and additional charges. If you need impartial advice on managing debt, you can read more on the government-backed website MoneyHelper.

People also asked

Can I apply for a property revolving credit facility if I have bad credit?

It is possible to get approved with bad credit, but it depends on the severity of the issues and the amount of equity in your property. A specialist broker can help match you with lenders who are more flexible with past credit issues.

Is a revolving credit facility secured against my personal home?

These specific facilities are secured as a second charge against your residential buy-to-let investment properties, not your main home, although your investment portfolio will be at risk if you fail to maintain payments.

How does a revolving credit facility differ from a standard business loan?

A standard business loan is typically an unsecured lump sum with fixed monthly repayments, whereas a property revolving credit facility is secured against your property and works like an overdraft where you only pay interest on what you draw.

Are there setup fees for a buy-to-let revolving credit facility?

Yes, there are typically setup fees, which may include valuation fees, legal costs, and broker arrangement fees, though these can often be added to the facility itself.

How long does it take to arrange a secured revolving credit facility?

The initial setup process can take several weeks as it requires legal work and valuations, but once the facility is active, you can typically draw down funds within 24 to 48 hours.

Making the right choice for your portfolio

If you are looking for the flexibility of an overdraft secured against your buy-to-let property, trying to go direct to a lender may severely limit your options. Most lenders in this space choose to work exclusively through trusted brokers. A specialist broker can compare the market to find the most suitable product for your specific circumstances.

To discuss your options and see how a secured second-charge facility could support your property business, contact Promise Money today. You can read more about how this product works on our revolving credit hub, or call our team directly on 01902 585020 for a professional consultation.