2nd charge business expansion, RM9
Client circumstances:
Our client wanted to quickly expand his business and required £197,700 to purchase new premises for their cosmetic surgery company. They planned to use the equity in one of their buy-to-let assets- valued at £350,000 with an existing first charge mortgage of £29,800.
As they didn’t have two years of accounts – an absolute minimum for most high street lenders – they were unable to secure mainstream finance. They needed a short-term fix so not to miss out on this opportunity, so their broker immediately contacted us.
MT Finance solution:
As an asset-based lender, we do not require evidence of trading history or accounts, instead we focus on the asset in question and if the bridging loan makes sense.
Immediately after receiving the initial enquiry, our team instructed a valuation of the investment property. The valuation took place three days later and we received the report within two working days. Three days after obtaining the legal checklist of requirements, we released a £197,700 second charge bridging loan, at 65% loan to value. Interest was retained at 0.85% over 24 months, with no exit fees or early repayment charges.
Our strong relationships with the broker, solicitor, and valuer all contributed to our ability to complete this second charge bridging loan in only nine working days.
The benefits:
By taking out our second charge bridging loan, our client was able to purchase the new business premises, allowing them to expand their cosmetic surgery business as well as their property portfolio.
Once the client’s business has been trading long enough to provide suitable accounts to a commercial mortgage provider, they will then redeem our bridging loan. If this isn’t viable, they will refinance the security property with a standard BTL mortgage, but the 24 month term will give them plenty of breathing space to arrange either option.
