The Enquiry: The client came to us requiring a £2.15m net loan to refinance an existing bridge that was coming to the end of its term. The property was a £10,000 sqft residential home in Solihull, Birmingham, one of the largest in the area.

The Complexities:
– Although the property was owned in a limited company deeming the deal unregulated, both directors of that company resided in the property making the deal unattractive to many lenders as it would cause issues if the property fell into receivership
– The client himself had a number of previous insolvencies with one still outstanding, this again tainted the deal making lenders uncomfortable about the clients credit profile.
– With this being the clients third consecutive bridge, this was an immediate no for most lenders as they had immediate concerns around repayment of another bridge. This was further hampered by the client having no clear cut exit (usually sale or like for like refinance from a term loan). This led to some creative solutions, trying to give the lender a clear picture on loan redemption.
– The client valuation estimate was £3.7m for the property, however the valuation report came back in at £3.1m which led to a massively reduced offer. After some discussions and a lot of further evidence provided to the valuer, they agreed to increase their valuation to £3.5m,
bringing the net loan back in line with where it needed to be to redeem the existing loan.

Conclusion: A £2.4m gross loan at 1% a month over 12 months which netted the client what he needed to repay the existing lender and gave him suitable time to repay.