case studies

cross 2nd charge for commercial purchase

client circumstances:

Client required funds to complete the purchase of their business premises. The client wanted to leverage the equity in two of their investment properties that already had first charges secured on them – one was a residential property, the other was an HMO, with a combined open market value of £1.05 million.

They had gone down the re-mortgage route, but the process was taking too long, and the transaction was at risk of falling through due to the delays. The clients urgently needed £414,000 by Christmas Eve or they would lose the opportunity to purchase the commercial asset.

MT Finance solution:

We instructed our solicitor and the surveyor on the same day as receiving the valuation fee, and received the valuation report back on the 21st of December. On the morning of the 23rd of December, we received the first replies to our legal requirement checklist. Our Mortgage Admin team then obtained consent from the client’s first charge mortgage lender within 2 hours on that same day.

Our solicitor and our underwriter worked on this matter as a priority. £414,000 was released to the client by 6pm on 23rd December, as a second charge bridging loan across two assets at 64% LTV. Interest was retained at 0.80% over a 12-month term. There are no exit fees or early redemption charges.

the benefits:

By taking out a bridging loan, the clients were able to complete the purchase of the premises, where they had operated their business from for many years, just in time for Christmas. The 12-month term will give them enough time to refinance out of our loan with longer term finance and as with all our loans, there are no penalty fees if they choose to pay the bridging loan off early.

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