⭐ 𝗪𝗵𝗲𝗻 𝗙𝘂𝗻𝗱𝗶𝗻𝗴 𝗚𝗼𝗲𝘀 𝗪𝗿𝗼𝗻𝗴: 𝗧𝗵𝗲 𝗥𝗲𝗮𝗹 𝗥𝗶𝘀𝗸𝘀 𝗕𝗲𝗵𝗶𝗻𝗱 "𝗟𝗼𝗮𝗻 𝗦𝘁𝗮𝗰𝗸𝗶𝗻𝗴" 𝗳𝗼𝗿 𝗦𝗠𝗘 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀 𝗮𝗻𝗱 𝗣𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀! I came across a powerful reminder recently from this years NACFB Expo about the growing risks of loan stacking for SMEs and property investors. It’s becoming increasingly common for businesses under pressure to take multiple short‑term loans from different lenders, often without fully understanding the long‑term impact. On the surface, it can feel like a quick fix. In reality, it can push a business into a cycle of over‑leverage, cash‑flow strain and reduced refinancing options. And when the repayments start overlapping, the pressure can become unmanageable. But here’s the part that really stood out for me. One of my clients, an East Midlands engineering firm, had unknowingly stacked multiple business loans totalling more than £450k. No broker had been involved. One of the loans alone was charging over 30% a year on an interest‑only basis. When we reviewed everything, we worked out that refinancing the full amount with a single lender at even sub‑12% could save them around £30k a month in interest. That’s £360k a year back into their cash flow! And the same pattern is now appearing in property finance. I’m seeing more cases where borrowers take out a second‑charge bridging loan behind a first‑charge mortgage, not because it fits a structured plan, but because: • They’re already over‑leveraged on their portfolio • They don’t have a clear or realistic exit • They’re relying on a refinance that may not be achievable • They’re using short‑term debt to cover long‑term problems This is where things start to unravel. A second charge can be a smart tool when used properly, but when used for the wrong reasons it can leave a borrower stuck, unable to refinance and facing outcomes like forced sale or default. As brokers, lenders and advisers, we have a responsibility to slow things down, ask the right questions and make sure clients understand the implications before taking on more debt. Sometimes the best advice isn’t “here’s another loan”. Sometimes it’s “let’s step back and look at the bigger picture”. ⭐ 𝗜𝗳 𝘆𝗼𝘂’𝗿𝗲 𝗮𝗻 𝗦𝗠𝗘 𝗼𝘄𝗻𝗲𝗿 𝗼𝗿 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆 𝗶𝗻𝘃𝗲𝘀𝘁𝗼𝗿 𝗳𝗲𝗲𝗹𝗶𝗻𝗴 𝘁𝗵𝗲 𝗽𝗿𝗲𝘀𝘀𝘂𝗿𝗲, 𝗿𝗲𝗮𝗰𝗵 𝗼𝘂𝘁. 𝗪𝗶𝘁𝗵 𝗮𝗰𝗰𝗲𝘀𝘀 𝘁𝗼 𝗺𝗼𝗿𝗲 𝘁𝗵𝗮𝗻 𝟮𝟱𝟬 𝗹𝗲𝗻𝗱𝗲𝗿𝘀, 𝗜 𝗰𝗮𝗻 𝗵𝗲𝗹𝗽 𝘆𝗼𝘂 𝗿𝗲𝘃𝗶𝗲𝘄 𝘆𝗼𝘂𝗿 𝗰𝘂𝗿𝗿𝗲𝗻𝘁 𝗱𝗲𝗯𝘁, 𝗮𝘀𝘀𝗲𝘀𝘀 𝘁𝗵𝗲 𝗿𝗶𝘀𝗸𝘀 𝗮𝗻𝗱 𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 𝗮 𝘀𝗮𝗳𝗲𝗿, 𝗺𝗼𝗿𝗲 𝘀𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗹𝗲 𝗳𝘂𝗻𝗱𝗶𝗻𝗴 𝗽𝗹𝗮𝗻 𝗯𝗲𝗳𝗼𝗿𝗲 𝘁𝗵𝗶𝗻𝗴𝘀 𝗯𝗲𝗰𝗼𝗺𝗲 𝘂𝗻𝗺𝗮𝗻𝗮𝗴𝗲𝗮𝗯𝗹𝗲. 📧 sanjay@finances.house 📞 07949 291403 📞 0121 285 3995

Posted by Sanjay Majithia at 2026-06-16 11:35:19 UTC