2nd charge for SPV capital injection, N10
Client circumstances:
Our clients required £500,000 to purchase a former police station through their recently established SPV. Their intention was to convert the property into a block of apartments, but they needed funds to cover the full purchase and all associated costs. They were planning to raise the finances they needed by taking out a second charge bridging loan on their main residence, which had an OMV of £2,000,000.
The clients – who were foreign nationals – had a large share portfolio but they didn’t want to liquidate it just yet. They were also unable to secure mainstream finance as their SPV had less than two years of accounts, which is an absolute minimum for most high street lenders. They had however previously taken out a bridging loan with MT Finance and had been happy with the service, speed, and terms we provided. This prompted their broker to contact us again.
MT Finance solution:
We were able to provide the full £500,000 by way of a second charge bridging loan which was secured against the clients’ main residence at 64% LTV, based on the OMV of £2,000,000. Interest was retained at 0.85% over a 12-month term. As we have no early repayment charges or fees, the clients have the option of repaying their bridging loan early without facing any financial penalties.
The benefits:
By taking out a second charge bridging loan on their main residence, the clients were able to take advantage of this business opportunity and purchase the former police station through their SPV without facing any delays. The 12-month term gives them plenty of time to liquidate their shares and repay the bridging loan. If they do this early, then they will not incur any ERCs or charges.
