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Bridge Loan Solution for Renovations on £6M Hampshire Property

£1.5M Hampshire

Bridge loans act as a means to fund all sorts of scenarios, especially when you’re in a tight spot, and without the necessary funds to hand to finish developments – this was the case for our clients, with their high-value Hampshire new build.

The Scenario

Our clients were facing several issues over the course of their renovations on their £6M property in Stockport, Hampshire. To resolve these issues, they recognised the need for a short-term loan, of substantial size, in order to pay the next instalment for their builders and fund the remaining renovations. 

While the property had already been evaluated, at £6M, the potential increase of value when taking into account the GDV (Gross Development Value) would set the property’s worth at around £9.25M. 

Yet, to achieve this value – they would need to finish the renovations, and as it stood, they were lacking the funds to do so. 

Here are the problems they were facing:

  • There was the approaching payment of the builders that needed to be paid – without this, work would come to a halt. 
  • If our clients were to pursue a bridge loan, they were unsure of how they would be able to pay within the typically 12-month terms – as a high-value property such as this would take time to sell in a niche market.
  • They also recognised the difficulty they would have in sourcing a suitable lender to borrow from due to the uniqueness of the property, and the level of risk posed.
  • The loan size they needed would come with high-interest payments, so they would need to organise finance in three separate drawdowns to mitigate a large interest payment.

The clients required a bespoke bridge loan and needed it as soon as possible. Otherwise, the completion of their renovations was at risk. 

The Solution

Thankfully, they came to us for help in organising the bridge they needed, and through our network of lenders, we were able to find two lenders that seemed well-suited to facilitate this bespoke loan.

After choosing the lender with the best rates, and one that allowed for the drawdown structure the clients needed for repayment, we organised a bridge loan of £1.5M at a 0.59% interest rate.

We also managed to secure this over a term of 18 months, instead of the regular 12 months – this would allow our clients a comfortable amount of time to sell the property once renovations had been completed and to find the right buyer for this unique, high-value property. 

Additionally, regarding the interest rates, lenders offer a rolled-up scheme for interest payments – and this is what our clients opted for as it suited their needs perfectly. They would be able to roll up payments over the three more manageable drawdowns, allowing them to comfortably pay in segments over the course of 18 months.

Despite the large loan size, and interest payments, our clients already had a solid exit strategy in place – they would repay the loan through the sale of the finished property – which had a projected value of £9.25M. 

All of this, we managed to organise within only 5 weeks and we met our client’s needs completely, easing their concerns regarding the time-sensitive problems they were facing. 

Without the help of our expert bridge loan brokers, they may have been at risk of running out of funds and not being able to complete the property to its projected value on time.

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Whatever you need your next short-term finance loan for, we’ve got you covered. Let our friendly expert team find you the perfect tailor-made solution.

  • Upsizing
  • Downsizing
  • New Build
  • Investment
  • Refinancing
  • Renovation
  • Commercial
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