Auction Property Finance in Under 2 Weeks
Auction finance offers structured terms specifically for purchasing property at an auction and receiving funds within the 28-day deadline.
KP Finance can provide competitive terms whether you are before or after the bidding stage – and we can help you structure the finance in the best way possible.
We understand that speed is key with auction finance and we are here to provide indicative terms in 24-48 hours and successful applicants can receive funding in 2 weeks or sooner.
To make an inquiry, call the number below or use the form provided. The KP Finance team can offer knowledgeable, clear and constructive feedback whilst helping you get an initial decision in principle and funding usually within 3-4 weeks.
Call +44 203 488 1128
Samuel Kalms, Director
Why Use KP Finance For Auction Finance Loans?
At KP Finance, we have real hands-on experience with arranging the right finance to purchase property at an auction.
Our ability to offer sound advice and draw on previous experience allows us to help you get the best funding possible, with rates, terms and structure that suits your needs.
As a specialist broker, we have close connections with private lenders and funders who can take a view on different auction finance opportunities – and provide very personalised terms for your needs.
We are passionate about making your entire project a success from start to finish. We’ll stay in touch with both you and the lender throughout the loan term to make sure that everything is progressing as planned. If you need an extension or want to refinance, we are happy to help manage this with the lender as well.
We also understand that speed and timing is key with any purchase, especially when it is an auction purchase and we will work closely with you to make the sale and completion as smooth as possible.
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ToggleHow Does Auction Finance Work?
Auction finance is a type of funding that is structured for buying a property at an auction. Perhaps you have been going through the catalogues of official auction houses or attending property auctions. The skill is being able to find an undervalued property at 70%-80% of its value and seeing the potential to improve and increase its value.
If you win the bidding at a property auction, you will be required to provide 10% of the funds immediately to secure the property and then you have 28 days to come up with the remaining 90% of the property’s purchase price.
Auction bridging loans, also known as auction finance, can offer funding of up to 75% of the property value for residential properties, or up to 60% for commercial properties. The loan is secured against the property that is purchased by way of first or second charge.
To meet the deadline, auction finance lenders can offer quick funding, available in 1,2 or 3 weeks, so that you do not lose your deposit and can secure the property on time.
From there, the terms of the loan are similar to a bridging loan, helping you borrow over 1 to 24 months, with interest rolled up and repaid upon the exit or completion of the loan term.
A typical exit might involve reselling the property at a higher price once upgrades, improvements or renovations have taken place, or refinance under a longer term financial product such as traditional or buy-to-let mortgage.
How To Apply For Auction Finance Step-By-Step
1️⃣ Get an Agreement in Principle (AIP)
Before the auction, speak to a specialist auction finance lender or bridging broker to get an Agreement in Principle. This gives you a clear idea of how much you can borrow and shows the auction house you’re a serious buyer.
2️⃣ Find the property and check the legal pack
Identify the property you want to bid on and review the auction legal pack carefully. Make sure there are no legal issues that might affect your finance or the purchase.
3️⃣ Make your auction bid
Attend the auction and place your bid. If you win, you’ll need to pay a 10% deposit on the day and exchange contracts immediately.
4️⃣ Submit your full finance application
After winning the auction, submit your full application to the lender. This includes providing personal details, property information, valuations, and supporting documents like proof of income or ID.
5️⃣ Complete the purchase
Once the lender has completed their checks and the valuation is approved, funds will be released. You’ll need to complete the full purchase, usually within 28 days of the auction.
What Can I Use Auction Finance For?
- Property purchases
- Investment property purchases
- Residential property
- Commercial property
- Renovations and refurbishments
- Chain breaks in property sales
- Land acquisition
What Are The Terms You Offer?
| Term | Details |
|---|---|
| Loan Term | 3-24 months |
| Loan Amount | £1M – £10M+ |
| LTV | Up to 75% |
| Interest Rates | From 0.70-1.20% per month |
| Repayment Type | Retained, Rolled-up or Serviced |
| Security | First charge |
What Kind of Properties Can You Purchase At An Auction?
- Residential
- Commercial (all asset classes),
- Mixed-use
- Land purchases
- HMOs
- Hotels
- Warehouses
- Garages
- Student accommodation
- Leisure centres and gyms
- Offices
- Blocks of flats
- Distressed properties
- Properties under probate
- Unmortgageable properties
- Properties in poor condition
What Are The Benefits of Auction Finance?
Fast funds to meet your deadline – Auction finance is designed to release funds quickly, often within days. This helps you meet the strict auction deadlines, where completion is usually required within 28 days of winning the bid.
Flexible terms are structured to help you – Lenders offer flexible loan terms to suit your needs. You can often choose interest roll-up, short terms, and tailor the finance to match your exit strategy, whether you plan to sell or refinance later.
Can grow a property portfolio – Auction finance allows you to buy properties you may not have been able to purchase with standard mortgages. This makes it easier to expand your property portfolio quickly, especially when good deals come up.
Seize an opportunity – When a great property deal appears at auction, auction finance gives you the confidence to bid, knowing you have funding ready. This lets you move fast and secure opportunities before others.
What is The Criteria For Auction Property Finance With KP Finance?
- UK resident or company
- Property used as security
- Property is in UK, Scotland or Wales
- Clear exit strategy
- Financial records and statements
- Proof of funds/deposit
- Good credit history preferred but not essential
Auction Finance – Repayment Example
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Loan amount: £500,000
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Interest rate: 1% per month (12% per year)
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Term: 24 months
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Interest payment: Rolled up (interest paid at the end)
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Monthly interest: £5,000
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Total interest over 24 months: £120,000
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Total to repay (loan + interest): £620,000
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Arrangement fee (2%): £10,000
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Exit fee (1%): £5,000
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Other fees (valuation, legal, admin): £3,000–£5,000
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Total fees: Around £18,000–£20,000
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Total cost (loan + interest + fees): Around £638,000
Should I Apply For Auction Finance Before or After I Bid?
When buying at auction, you can apply for auction finance either before or after you place your bid. Both options are available and each have their own benefits.
Many buyers choose to arrange auction finance before the auction. This is called getting an Agreement in Principle (AIP). It gives you a clear idea of how much you can borrow and helps you set your maximum bid. Having finance pre-approved can also give you confidence on the auction day, knowing that your lender is ready to support your purchase if you win and then you can move quickly.
However, if you have not arranged finance beforehand, you can still apply for auction finance after winning the bid. Many lenders are set up to move quickly and can provide funds within the 28-day completion period. You’ll need to act fast, provide the required documents, and work closely with your lender, solicitor, and broker to meet the deadline.
Case Studies
Frequently Asked Questions
Are You a Lender or a Broker?
KP Finance is a broker. Our expertise and experience in the auction and bridging loan industry allows us to place your loan requirements with the best and more suitable lender. This is not about getting the cheapest rates possible, but connecting you to a lender that understands your personal needs and requirements and can offer flexible terms.
Our track records demonstrates our ability to maximise approvals for our customers, helping them access fast funding to bring their projects to life. Please contact us at enquiries@kp-finance.com or call 0203 488 1128 to speak to a team member today.
How Much Does Auction Finance Cost?
Interest rates for auction bridging loans start from 0.40% per month over BOEBR (variable) or c.0.7%-1.25% fixed) and will vary depending on the level of risk and experience of the customer.
What Are The Additional Fees Involved With Auction Finance?
- Arrangement fees (typically 2%)
- Valuation fees
- Legal fees
- Exit fees (if applicable)
Which Parts of The UK Can You Lend To?
We proudly offer bridging finance in Aberdeen, Birmingham, Brighton, Bristol, Cardiff, Cornwall, Durham, Edinburgh, Glasgow, London, Liverpool, Leeds, Leicester, Manchester, Nottingham, Newcastle, Sheffield, Southampton and many more.
Is My Loan Secured Against The Property?
Yes, auction finance is secured against the enquired property or assets as a first legal charge.
How Soon Can I Receive a Decision in Principle?
KP Finance can typically provide an initial decision within 24 to 48 hours. We will require information about the property, its value and your plans for it. We may also request proof of funds for a deposit and recent financial records.
How Fast Can My Loan Be Funded?
Auction finance loans can be funded as quickly as 5 days (should circumstances allow) but the full process from start to finish can typically be 3 to 4 weeks
Are Repayments Made Monthly or Rolled Up?
The interest and repayments for bridging finance are usually rolled up and paid on exit of the loan term. Other options exist such as monthly (serviced) or interest deducted upfront (retained).
Is My Property At Risk of Repossession?
If your loan has been in arrears for a long time and there is no immediate sign of repayment, the lender may repossess the property in order to recover their losses.
However, before entering this stage, the lender may extend the terms of your loan, giving you longer to repay, but this will incur additional interest each month and possibly a late charge until the loan is paid off.
You may have the opportunity to refinance your loan under new terms, which may be less favourable.
At this point, KP Finance will be available to assist you and help you to arrange the best possible outcome.
