Case study 3

Product: First charge commercial bridge

Security: Restaurant with land in Essex

Gross Loan: £860,000

LTV: 64.22%

Term: 12 months

Borrower Type: Individual with credit issues

Purpose: The borrower applied for a loan as he was looking to refinance, but his current lenders were no longer willing to lend against commercial property. As he was waiting for planning to be granted on the site, bridging finance was suitable for him. 

Exit: The borrower intended to apply for planning permission to demolish the restaurant and build 8 houses on the land. Once planning was granted he intended to sell the site on to a developer. If planning was delayed or not granted, the borrower had a backup exit of sale with existing use. The restaurant that occupied the site was profitable and could also be sold if need be.

Key points:

  • Pivot lent against current value of the asset.
  • The borrower did have some historic credit issues but as both the primary exit and backup exit was sale, this did not affect his ability to repay our loan.
  • Security was located in a desirable, rural part of Essex with the underlying business having been trading for many years and providing cash flow.