Client circumstances:
Our client was a property developer who owned a development site which included multiple residential units. The majority had already been purchased and only eight remained, although sales had been agreed for many of these. Out of these eight, six were either complete or at the snagging stage while two were wind and watertight. There was only £150,000 of works left, but with their existing lender unable to facilitate further payments, the client urgently needed £2.36m to repay their existing charge and fund the outstanding works. They were also intending to use a portion of the £2.36m to purchase their next development project.
With their current charge quickly coming to an end, they urgently needed a short-term fix. Knowing our ability to move at speed, their broker got in touch.
MT Finance solution:
Working within a very tight deadline, the valuation was instructed immediately on 4th August, with the checklist being issued the same day. The valuation took place on the 5th and the report was received on the 8th, the next working day. Final legal documents were received on the morning of 10th August. Later that afternoon we released a bridging loan of £125,000 at 58% loan-to-value of both properties, with a cumulative open market value of £215,000. Interest was kept at 0.75% over a six-month term. In total, it took five working days to complete the bridging loan.
The benefits:
Thanks to our ability to work at speed, the client repaid their existing bridging loan before their deadline, and without incurring any late payment charges. The strong relationships we have cultivated with the solicitors, valuers and broker further helped to ensure funds were released in time. With the previous bridging loan repaid, the client can now focus on finalising long-term finance for their two investment properties, which is how they are intending to exit our bridging loan. If funds are received in under six months, they will not face any early repayment charges or exit fees.