Examples of Bridging Loans
In the past, I’ve had a client where they had a large property portfolio with no borrowing against the properties, but the properties themselves were in bad condition – there were urgent works that needed to be carried out. They were able to leverage the properties, raise funds against them and then, once they were in good condition, the plan was to remortgage them onto buy-to-let mortgages. They couldn’t do that at the time because the properties were in bad condition, so weren’t mortgageable.
I had another example where a borrower actually owned their own residence with no mortgage. They needed funds within four days for business purposes – there was an opportunity that came up; they needed to move really quickly – and we were able to turn that around within a short space of time for them to unlock just under £3 million for them to take advantage of this opportunity.
I had another case where three artists were looking to buy a commercial building together. One of the three artists had a bit of a shortfall so we raised a bridging loan for them. The plan was that they were going to repay that loan from the sale of some of their art. The fallback option was that if they couldn’t do that, they would raise a small commercial mortgage. We were able to turn that around, securing almost £600,000 on a property value of £3 million.
In another example of a second-charge bridging loan, the borrower was raising funds against their property to do works to two other properties which were then going to be sold. The sale of those properties would have cleared the bridging loan in full, but they didn’t have the funds to do the works so they needed a bridging loan and we were able to arrange that for them.
If you are interested in financing a property investment or would like to know more about how bridging loans work, please get in touch with Vintage Wealth Management today and our specialist advisers can provide all the guidance you need.
Joel Kersen
Head of Commercial Finance
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Joel Kersen
Head of Commercial Finance