What is a capital raise against investment property?
A capital raise involves borrowing against equity in an investment property your business or a director owns — releasing cash that is then used to replace or repay more expensive existing facilities. The new facility is secured against the property, typically at a lower cost and longer term than the facilities being replaced.
This is a business finance transaction for UK limited companies, LLPs, and trading partnerships. It is not debt consolidation for consumers. The purpose must be a legitimate business use — replacing business-purpose liabilities.
Why raise capital rather than refinance individual facilities?
Replace multiple high-cost facilities
Multiple simultaneous MCAs, unsecured loans, or business credit facilities each carry their own cost. A single property-secured facility typically offers materially lower aggregate cost and a single repayment.
Remove daily cash flow pressure
MCAs in particular take a daily percentage of card revenue — severely restricting working capital. Replacing them with a term loan restores predictable cash flow.
Fund HMRC settlement
HMRC arrears create enforcement risk (winding-up petition, distraint). A capital raise pays HMRC in full immediately, removing enforcement risk and replacing it with structured repayments to the lender.
Simplify the balance sheet
Multiple creditors — each with different payment dates, terms, and enforcement powers — create management complexity. A single secured creditor simplifies the position and the monthly cash flow requirement.
What facilities can be replaced?
The proceeds of a capital raise can be used to repay any existing business-purpose liabilities including:
Merchant cash advances
Active MCAs are often the most urgent to address — the daily holdback mechanism compounds pressure as revenue fluctuates. We regularly arrange capital raises specifically to exit MCA positions.
Short-term unsecured business loans
High-rate, short-term loans can be replaced with a property-secured facility at a longer term, reducing the monthly repayment burden.
HMRC arrears
VAT, PAYE, and corporation tax arrears — particularly where HMRC has issued a formal demand or a winding-up petition has been threatened. Paying HMRC in full eliminates enforcement risk from day one.
Overdrafts and trade creditors
Business overdrafts called in, or aged supplier debts creating legal risk — both can be addressed as part of a capital raise facility.
What security is required?
The facility is secured against UK investment property — typically a buy-to-let property, HMO, commercial property, or mixed-use property owned by the business or a director. Owner-occupied residential property is not eligible (regulated product). The lender places a first or second charge on the investment property.
This is a secured business facility. Your investment property is at risk if repayments are not maintained. Think carefully before proceeding and seek independent legal and financial advice before committing to a secured facility.
Director adverse credit — does it matter?
Yes, but it is not a barrier. Specialist lenders assess the property security (LTV and rental income), the business position, and the director's adverse credit as a combined picture. A strong property with significant equity and a clear repayment plan can offset adverse credit in the director's background. The type, severity, and recency of adverse credit all affect lender appetite — contact us with your full picture and we will identify the most suitable lenders.