€3m Bridging Loan on Ibiza Residential Property to Fund London Development Project

Raising short-term bridging finance on a property abroad is notoriously tricky - if it's your only option to raise funds, you need to go to the right specialist finance broker, or the deal just won’t happen.

This case is an excellent example of our industry knowledge, problem-solving and hard work that enables us to secure property development finance for clients in complex financial situations when other brokers have let them down.

The Scenario

Our clients came to us in need of quick finance of €3m to finish some significant development work on their London property.

They already had outstanding mortgages on the London property, which meant they’d been unsuccessful in raising further funds against it to finish the works.

They needed to find an alternative funding source, and they'd identified their residential property in Ibiza as a potential asset to secure the loan against.

But their stumbling block was finding a bridging lender that was happy to lend against an overseas property.

The lending pool is already significantly smaller than a standard mortgage for a large UK bridging loan, but raising finance against an overseas property reduces your options to a minimal number of private lenders.

The Solution

Our specialist finance adviser knew the difficulties of securing an overseas bridging loan against an asset abroad but was aware of two private lenders that had the potential to help.

We quickly gained a detailed overview of our client's financial situation and approached the lenders to obtain some initial figures for what their finance options could look like.

They were happy with the terms and were thrilled to have such a quick turnaround for a potential solution considering the difficulties they’d faced up to this point.

We liaised with their solicitor and our contact at the preferred lender to arrange the finance and secured a €3m loan against the Spanish property on a 12-month term, representing a 60% loan to value (LTV).

• The clients would repay the bridge within 12 months upon selling the property in Spain, giving them plenty of time to wait for a good offer and realise its full value.
• They also moved the ownership of their Ibiza property into a limited company before taking the loan, making their interest repayments more tax-efficient due to their existing personal income structure.

The bottom line...

If your mortgage broker isn’t aware of the specialist banks and lenders that could help with a complex case like this, you won't be able to get the finance you need.

We endeavour to explore all the possible finance options for our clients, regardless of the complexities that will come up along the way, and it’s our experience and commitment to each case that allows us to do that.