Our clients were facing time constraints and complications, yet we managed to secure bridging finance on two separate but intertwined occasions – for their initial land purchase, followed later with finance for property development on the land purchased.
Initially, our clients approached us looking to raise £450,000 for a land purchase in South London, Croydon for property development. The loan was to be secured against their current property that was being refurbished – the refurbishment was funded with their own money.
The sticking point came with the initial bridge loan; the property was not yet on the market and the refurbishment was not finalised. Additionally, there were issues regarding securing on the land.
With the current loan structure, the task was proving difficult. Our clients didn’t end up securing the land due to the delays and the case was at risk of falling through – this initial stage was set up during November 2021
To resolve this issue, and make sure our clients did not miss out on a potentially lucrative purchase, our broker continued to liaise with both the lender and the solicitor.
Once the refurbishment of the property had been completed in March 2022, thinking on his feet, our broker recommended a change in the structure of the loan; securing the loan solely on the current property. And with this alteration, our clients were successful.
Due to our broker’s quick thinking and experience, our clients returned to us again. Satisfied with results previously, they sought development finance on the land – they would require £600,000 for the build.
Overall, this was a wholly beneficial solution for our clients. Our broker secured a favourable deal from the lender with the bridge loan carrying no early repayment fees, no exit fees, and the clients would only be charged interest on an amount used.
Our clients would then be free to use £200,000 borrowed to fund the initial developments, repay early, and finish the build with their own funds while not being liable for the remaining £400,000 that was unused.
Our clients are in the process of refinancing additional properties in their portfolios. Additionally, they have sales of properties going through to make up the funds for future development.
This would give them the necessary time needed to complete their plans using their own money (after drawing down initially on the bridge loan amount for the start of development)
Throughout this process, our broker was instrumental in negotiating and securing the right loan structure for our client’s purposes, which came at no determent to the client and resulted in a far more beneficial and workable arrangement.
As it stands now, valuations have been completed on the land and the development appraisal, and they are awaiting solicitors to finalise.
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