First charge for commercial purchase and refurb, CO10

Client circumstances:

Our clients were in the process of purchasing a pub with a restaurant and accompanying guest rooms which they were planning to make light refurbishments to before reopening. Their intention was to reside in a small portion of the property while running the business. They had already sold their former home but still had a shortfall to complete on their purchase. The seller had issued a date for completion and the clients urgently needed a short-term fix of £315,000 to ensure they didn’t lose the property, and their new business. While they could have approached a high street lender, this had the potential to be too time-consuming. Instead, their broker immediately contacted us.

MT Finance solution:

As the clients were going to be residing in only 2% of the property, we were able to provide a first charge bridging loan of £315,000 at 60% LTV, based on the property’s valuation of £525,000. Interest was retained at a very competitive 0.79% over 18 months. Due to the hard work of our team, we were able to meet the seller’s deadline and completed only 14 days after our clients and the seller exchanged contracts.

As with all our bridging loans, the clients have the option of repaying their bridging loan early without facing any ERCs or financial penalties.

The benefits:

By taking out a first charge bridging loan with us, the clients were able to purchase the property as per the seller’s deadline, ensuring they have both a home and a business. The 18-month term gives them plenty of time to modernise the property before refinancing out of our bridging loan with longer term finance, against its increased value. If this happens prior to the end of the 18-month term, then they will not be charged any ERCs or fees.