Is your client caught up in interest rate swaps?
We were approached by an applicant looking for £3.2 million. The client had gotten caught up in interest rate swaps which ultimately resulted in defaults on his mortgage. The client’s mortgage lender sought repayment and appointed a Law of Property Act (LPA) receiver who took full control over the property and his tenant’s rental payments.
The client owned a mixed residential commercial property in south London, valued at £4.85 million. However, the property was an unfinished development. The client was part way through flat conversions of the upper parts and when finished the property would be worth £7 million –a potential of over £2 million profit for the client.
At MTF we are committed to the idea that a bridging finance loan is about creating the opportunity to make or save the borrower money and after reviewing the merits of the case, we were able to provide a £3.2 million bridging loan secured by way of first charge over 10 months.
In just 2 weeks, not only was the client able redeem the existing mortgage, regaining control of his asset, the loan meant the applicant had the money to complete the work on the flats, giving him the opportunity to make himself a significant profit.
If your client is prevented in the immediate term from capitalising on a particular opportunity, and that impediment is something which can be remedied with time, and if the cost of short term finance is justified, bridging finance is not only now a mainstream and acceptable solution, it is commercially the right one.