Case Studies for Bridging Loans
We offer many different types of bridging loans to ensure that no matter what financial situation you are in, there is an option available. Below are a number of real-life scenarios where our bridging loans have helped.
We were approached by a UK national who was looking to purchase an old textile mill in the north of England so he could develop it into student flats (subject to planning). He had a substantial deposit and other assets to pledge as security but although he was in the process of undertaking a similar development close-by, he was deemed by the mainstream lenders as having "little experience".
Before contacting any lenders, we met the client on-site to fully understand his requirements and through our vast database of lenders we quickly identified a company who was best suited to not only providing the development finance required for the deal but also one who would be able to take a view on his lack of experience by looking at the bigger picture of this deal.
Prior to commencement, it was immediately evident due to the previous uses of the building that the nature of the security, would bring with it, legal and environmental issues which required a lender with the knowledge and experience needed to work with us all on the matters in question. Our lending contacts were of the utmost importance in obtaining funding in this highly complex area and we worked alongside the borrower, every step of the way until the purchase completed. We even used our outside contacts to obtain the specialist reports required by the lender to achieve funding.
It was the hands-on involvement of UK Property Finance which ensured the case completed. The legal process, as suspected was very complicated and difficult with problematic tenancy agreements, asbestos and other environmental issues plus title problems which meant that only due to the experience of the staff at UK Property Finance was the case able to complete.
By using an experienced and qualified broker whom added value due to its knowledge, the case progressed with minimal issues to all parties and prevented our client missing out on an excellent opportunity.
Overall, a very satisfied and repeat client and a good deal completed.
Claire and Steve found an ideal investment property at auction. They needed to raise 100% of the auction price plus some extra money to cover the cost of renovation. They would then sell the property and repay the bridging loan.
Although they had little available cash of their own, they were able to use the auction property and their existing property as security which gave them enough funds to buy, renovate and cover fees. We managed to get the bridging finance through well within the 28 days prescribed by the auction company and Steve and Claire had 6 months to do all the work before selling. At this time they repaid the bridging loan and made a tidy profit.
A local developer found a farm plot with attached cottages, outbuildings and 7 acres of land. The developer was well known in the area and fully understood that the plot had great potential. Although he was very experienced with projects of this size, his bank would not lend him the funds needed, even though the purchase price was significantly below market valuation.
We assessed his needs and managed to help find a quick solution that meant he was able to acquire the development finance required within days. The developer then successfully applied for the planning permission required to build additional properties on the land thus making a substantial gain on his original investment. Half the properties were sold to repay the bridging loan and the remainder were kept to help fund future developments and as an eventual pension pot.
Naomi inherited a property that needed significant renovation for it to reach modern day living standards. Whilst Naomi was in the process of applying for a mortgage on the property she became impatient and removed the kitchen and bathroom.
When the mortgage surveyor came to value the property he deemed that it was now not habitable and Naomi was therefore unable to get the mortgage required.
Additionally, Naomi had no funds of her own to complete the works necessary to make the property habitable again.
Naomi emailed us using our “obtain a quote” form and one of our experts was able to obtain property development finance of £45,000 which enabled her to install a new kitchen, bathroom and completely renovate the property. As soon as this was done Naomi was able to return to her mortgage broker and obtain a mortgage which was used to repay the bridging loan.
Pete ran a successful manufacturing business along with his business partner John. John had to leave the company at short notice for personal reasons and wanted to sell the business however Pete wanted to continue running it by himself.
Pete came to us for the funding needed to buy Johns shares and additionally to keep the business running smoothly through the transitional period. We were able to lend all the required money to Pete secured on the company's unencumbered business premises and with an additional charge over Pete's home. This gave Pete enough time to raise funds through a management buy-in and repay the commercial bridging loan.
As a highly successful landlord looking to expand his business empire, Jeff Khan was always looking for new and more profitable areas in which to grow. He had been investing in standard terraced and semi-detached properties that needed updating before refinancing onto a BTL basis, however Jeff was no longer happy with the scale of this method as the ongoing squeezed rental profit margins were much lower that he was looking to achieve.
Whilst generating ideas, he came across a badly fire damaged small brick-built ex-mill and following a eureka moment he had the idea of converting this into flats that could be used to compliment the student and young professional lets in the area. The project would give Jeff a vastly improved profit return as well as improving the view of the area that was being badly blighted by the appearance of the building. The structure of the unit was fine despite the dilapidated internal condition and as Jeff was renowned for the high end finish of his properties he knew that he would be on to a winner provided he could obtain the finance required for the purchase and renovation.
Although Jeff was a very well organised and professional individual, his local business bank, due to his lack of experience, was not able to arrange the required finance. However, luckily for Jeff, the manager had good experiences of recommended UK Property Finance in the past and gave him our number to call.
We met Jeff on site and reviewed in-depth the reams of paper that Jeff had meticulously prepared in support of the development. Due to our wide ranging knowledge, we immediately knew that Jeff would be wasting his time and effort by visiting numerous high street lenders in his attempt to obtain and locate the required finance. High Street lenders usually prefer to fund tried and tested applicants and as this was a new and much larger venture than Jeff had attempted in the past, it was clearly not something for the traditional banks.
With this in mind, we contacted a number of so called 'challenger banks' and gave a brief overview. These are smaller specialist lenders who are growing in stature and challenging the dominance of the much larger and better known institutions. A number of those approached could see the benefit in Jeff's project and within a week we had 3 firm offers to discuss with Jeff. One of the offers included the funding for the full cost of the development and as such this was the lender chosen by Jeff.
We worked with Jeff in presenting the full case to the lender in the right manner and soon achieved a formal offer and subsequent funding for the project. Jeff, being Jeff, already had the builders lined up and work commenced immediately on receipt of the first tranche of money. A fully completed 'show flat' soon followed and within 9 months of the 18 month agreed term, Jeff had the project finished to the highest of standards and over half of the 200 flats had been pre-let, with deposits taken.
On Jeff's behalf, we were able to obtain highly competitive longer term finance for the now completed and part rented property and within 12 months of initial receipt, Jeff had repaid the development finance and was sitting back and watching the profits roll in. It is anticipated, due to the rent receipts, that the property will be mortgage free within 5 years.
We are currently working with Jeff on his 2nd project.
As an elderly couple living in a large house in an expensive part of London, Helen and David had finally decided that enough was enough. They could not afford to run or maintain the property correctly nor did they have enough 'day to day' income to live as they would like, which included occasional holidays and visits to their children and grandchildren who had left London some years beforehand. Helen & David had calculated that for a quarter of the price of their London property, they could sell up and buy a virtually identical house the Midlands and within 2 streets of their close family. This would leave Helen and David with a property similar in stature to their current home but with lots of extra cash in the bank to enjoy the remainder of their lives and vastly improve their living standards.
Unfortunately however the property in the Midlands had received much interest from other potential buyers and as Helen and David had a house to sell that was not as yet even properly marketable, they were unable to make an acceptable offer on the property. They did not have access to cash which would enable them to purchase the new house outright and additionally and just as importantly they had many memories in the London property, having lived in the house for over 40 years and many sentimental objects that they wanted to carefully sort through before selling, so a quick move was not really an option for them.
UK Property Finance were known to the clients' son as he had used our services in the past when arranging development finance and as such he asked us to speak with his parents. We met with Helen and David and after a brief discussion we showed them how we could raise the full purchase price of the new property without them having to sell their current London home to arrange the funds. We would also be able to raise extra funds for a much needed 'tidy up' prior to marketing. They were overjoyed with our proposal and asked us to proceed as a matter of urgency. A 'Decision in Principle' was immediately presented to the selling estate agent allowing the offer of Helen and David to be formally accepted by the seller.
The finance was available within 2 weeks of our initial discussion and at a market leading rate. Helen and David now had 12 months in which to move properties and sell up but in an organised way that suited them. The finance arranged had no monthly payments and no exit penalties if repaid within the 12 month term. The sale of Helen & David's property happened 7 months and 6 days after the finance was issued and as such when the loan was repaid, interest owed was calculated to the day for the time that the loan was active.
Helen & David could not be happier about how things have turned out.
Janet and Peter were about to retire and decided to spend their savings on an old farmhouse in the Lake District which ended up costing more than they expected. The property itself needed considerable attention including one or two structural repairs which they were unable to finance.
Although their savings were exhausted, the couple still had a considerable amount of equity tied in with their current property. They found themselves in urgent need of short term bridging finance which would be repaid once they had moved into their new retirement property and sold their existing house.
Unable to find suitable finance by other means, Janet and Peter turned to the team at UK Property Finance who were able to raise the required funds almost immediately - thus enabling the much needed repair works to go ahead and helping the couple realise their dream of a home in the countryside.
This is one of several success stories that UK Property Finance is proud to be involved in. If you are in a similar situation to the one experienced by Janet and Peter - then contact our team today and discover how we can help turn your future plans into a reality.
Speak To A Professional About Bridging Loans
If you would like further information, please take advantage of our free service and complete the “obtain a quote” form. One of our specialists will contact you with the information required. Our team has a vast amount of experience with bridging loans and we understand that speed and quality of service is of the essence.