Fast Bridging Loan For Complex Development Project

The Scenario

Our clients came to us after their original lender’s facility for their investment property (a large detached manor house) was expiring, and they were potentially at risk of the property being repossessed.

• When they’d originally purchased the property, it was being utilised as a commercial asset.
• But our clients had obtained change of use to residential.
• And secured planning permission for a self-build plot on the same title

With the project now attracting a potentially more favourable bridging rate thanks to an increased value and now being a residential asset, our clients were looking to refinance to raise capital and complete the interior renovations.

They needed a bridging loan of £1M for the internal refurbishments.

The problem?

• Their existing lender wasn’t interested in extending their current finance or negotiating new terms.
• They needed funds quickly (in a month’s time, which was high-pressure considering the requirements of a full valuation and quantity surveyor visit).
• They also wanted a £300k drawdown facility for works in arrears – an additional demand of flexibility
• They needed the new valuation to include the presence of land with planning permission on the same title (and most lenders wouldn’t accept this – they’d only value the existing bricks and mortar)
• And while the asset type had changed to residential from commercial, there were still elements of commercial use inside the property (it currently didn’t have bedrooms)

As it stood, our clients were facing a time-sensitive and complex scenario that hinged on a number of things going their way.

The Solution

The biggest challenge was finding an appropriate lender - one who could facilitate all the needs of our clients.

We have a strong relationship with one lender we knew could be more flexible on their valuation terms, and they were willing to incorporate the self-build plot value and the land - not just the property itself – in their valuation.

• And with our broker on hand to push the case through, they could organise this within the time scale they needed.
• We secured the bridge loan of £1M with the drawdown facility of £300k they needed.
• At an interest rate of 0.89% per month over a 12-month term.
• With retained interest, meaning our clients paid the interest upfront and didn’t need to worry about ring-fencing cash to cover it – they could focus on funding their development.
• And we managed to complete within the time frame – despite the complexity and initial problems with facilitating the bridge – we got it done in 37 calendar days.

The deal-breaker for this case? Our broker.

From his industry knowledge - approaching the right lenders that could potentially facilitate the quick turnaround, bespoke property use and awkward valuation terms – to his dedication to getting this case over the line, he went the extra mile and then some.

Always on other end of the phone, liaising with the surveyor, solicitor, valuer, lender, and client on a daily basis at points to ensure timely completion.

This type of deal simply wouldn’t get done without an expert broker behind it.