Bridge Loan For Property Renovations On £6m Hampshire New Build

The Scenario

Our clients faced several time-sensitive issues in completing development for their Hampshire property – a large, eight-bedroom new build with surrounding land spanning 27 acres.

To ensure the completion of a single, high-value asset such as this one; our clients needed a substantial amount of funding.

Our clients initially came to us seeking a bridge loan to help complete renovations on their new build property in Hampshire – this property was valued already at £6M, and with renovations taken into account, the GDV (Gross Development Value) was sitting at £9.25M.

If they could continue to fund the renovations through a bridge loan, then they would be able to finish the property on time.

There were some problems brewing, however.

At the time our clients reached out to us, they were running out of funds, the next instalment payment for the builders was approaching, and they were also concerned about the niche market in which they would be selling the property eventually.

They were also concerned about lenders – interest rates would be high, and the clients would require a more bespoke bridge loan that could potentially be difficult to source.

They required £1.5M in total but would need it in three drawdowns over the project's term. This would be to save on interest payments as, with drawdown, the interest due would only be payable on the amount drawn each time and not the full loan value.

As it stood, they were under increasing pressure to deliver payments to their builders to ensure work continued on this high-value asset.

The Solution

Here’s how we helped our clients get the bespoke bridge loan they needed:

• Through our large network of lenders, we approached two different options to source what our clients were after. We opted for the lender offering the most competitive rate and one that could facilitate the drawdown structure the clients needed.
  
  
• We negotiated finance for the clients at a 0.59% interest rate on a bridge loan of £1.5M, spanning a term of 18 months. Typically, short-term loans such as bridge loans have 12-month terms, yet given the property's uniqueness, it would need more time to sell once complete.
  
  
• With the interest rate, our clients were able to roll up payments across the three drawdowns, meaning they could handle the large interest payments in manageable segments over the course of repayment.
  
  
• Our clients would repay the loan through their exit strategy, which was to be the proceeds raised through the eventual sale of the high-value Hampshire property.
  
  
• Due to their concerns on certain time-sensitive issues, we managed to secure finance for them within only 5 weeks.

Without an expert broker’s help, they would have been at a loss on which lenders to approach directly.

And given how individual and distinct their property was, it would have been very difficult to find a lender willing to facilitate all our client’s needs without our help in the process.

From application to completion, we guided our clients and made sure they felt at ease.

We prioritised resolving this case and securing finance as quickly as possible and often responded out of hours to ensure the clients were up to speed and in the loop.

If you're looking for similar funding, get in touch today.