Risk Warnings | Posfin Capital

⚠️ YOUR PROPERTY MAY BE AT RISK

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A LOAN SECURED AGAINST IT. Secured loans use your property as collateral. Failure to repay may result in possession proceedings being taken against you. Please read all risk warnings carefully before proceeding.

Understanding Our Products

Posfin Capital offers two types of secured lending product. It is important that you understand which type applies to your loan, as this affects your legal protections and rights.

Feature	Regulated Loan	Unregulated Loan
Who it's for	Individuals — personal, domestic, or residential use	Limited companies, SPVs, or genuine business purposes
FCA protection	✓ Full FCA consumer protections apply	✗ FCA consumer protections do not apply
Financial Ombudsman	✓ Eligible to complain to FOS	✗ FOS eligibility limited
Cooling-off period	✓ 14-day right of withdrawal	✗ No statutory cooling-off period
Independent legal advice	Recommended	Required where stipulated by lender
Typical use	Individuals bridging personal property transactions	Property development, investment, business cashflow via SPV

If you are unsure whether your loan is regulated or unregulated, ask your broker before proceeding. We will confirm in writing which category applies to your application.

FCA REGULATED

Regulated Loans — Consumer Protections

Regulated loans are governed by the Consumer Credit Act 1974 and the Financial Services and Markets Act 2000. The following protections apply:

Your rights include:

Right to withdraw: You have 14 days from the date of the agreement to withdraw without reason
Right to settle early: You may repay your loan early and receive a statutory rebate on interest
Right to complain: You may escalate unresolved complaints to the Financial Ombudsman Service (FOS) free of charge
Pre-contract information: You must receive a Standard European Consumer Credit Information (SECCI) form before signing
Adequate explanations: We are required to explain the key features of the product so you can make an informed decision

Key risks:

Your property may be repossessed if you fail to repay
Interest rolls up over the term — the total amount repayable may be significantly higher than the amount borrowed
Bridging finance is short-term — you must have a credible exit strategy (sale or refinance) before completion
If your exit strategy fails, you may face difficulty repaying at term end

UNREGULATED — BUSINESS PURPOSE

Unregulated Loans — Business Purpose

Unregulated loans are advanced for genuine business purposes, typically to limited companies or SPVs. These loans fall outside the scope of FCA consumer credit regulation.

Important:

No FCA consumer protections: The Consumer Credit Act protections described above do not apply
No FOS access: You cannot refer disputes to the Financial Ombudsman Service (eligibility criteria apply)
No cooling-off period: There is no statutory right to withdraw once the agreement is signed
Business purpose requirement: The majority of loan proceeds must be used for genuine business purposes. Misrepresenting the purpose of a loan is a serious matter and may constitute fraud
Director personal guarantees: Lenders may require personal guarantees from company directors, meaning your personal assets (including your home) may be at risk if the company fails to repay

Key risks:

Your property (and personal assets if a guarantee is given) may be repossessed if the loan is not repaid
Interest rolls up — total repayment amount significantly exceeds initial loan
Short-term facility — exit strategy must be in place before drawdown
Lender may take enforcement action more quickly than in regulated lending

We strongly recommend you seek independent legal and financial advice before entering into any unregulated loan agreement.

General Risks — All Products

Interest rate risk: Bridging loan interest rates are typically higher than standard mortgage rates. Understand the full cost of borrowing before proceeding.
Exit risk: If you cannot sell or refinance at term end, you may be unable to repay the loan, leading to default and potential possession.
Valuation risk: Property values can fall. If the value of your security declines, your LTV increases and lender enforcement may follow.
Legal costs: You are responsible for your own and the lender's legal costs. These can be substantial and are payable whether or not the transaction completes.
Completion risk: Loan offers are subject to valuation and underwriting. An offer is not a guarantee of funds.

Before you proceed, make sure you:

Have a clear and credible exit strategy
Can afford to repay the loan at term end even if your exit takes longer than expected
Understand the total cost of borrowing including all fees and interest
Have taken independent legal advice if required

⚠️ SEEK INDEPENDENT ADVICE

If you are in any doubt about whether this type of finance is suitable for your circumstances, please seek independent financial and legal advice before proceeding. Posfin Capital acts as a credit broker. We are not financial advisers and cannot advise you on the suitability of a product for your personal circumstances.