High Loan-to-Value Commercial Bridging Finance
Commercial bridging finance has many functions. In the majority of applications, the main focus for borrowers is for speed and certainty of delivery. We have completed transactions in the Licenced Trade, Healthcare, Office, Retail, Leisure and Industrial sectors across the UK.
Commercial Property Bridging Finance is a popular method to quickly raise funds to refinance or purchase a commercial asset. The UK bridging finance sector was estimated to be worth £4bn in the year 2016. This increased liquidity has created many opportunities for borrowers.
Typical terms for Commercial Property Bridging Finance range from 1 to 36 months, with interest rates from 0.75% to 1.50% per month. The cost of funds is determined by the risk of the transaction and factors like borrower experience, credit history, gearing, location and exit. Products are made up of an arrangement fee, a monthly interest rate and an exit fee. The borrower will also have to cover the cost of the valuation of the property, and the legal work to complete the conveyancing. We provide our clients with advice on these costs to ensure they achieve value.
The monthly cost of interest can be rolled into the loan, or serviced monthly by the borrower, or a combination of these. Borrowers can raise finance in their individual names, through a company or through their pension. The options available and funders tend to be flexible. A recent example of a completed deal is:
- Acquisition of a listed building without planning permission in the West of Scotland.
- 100% of the purchase price was funded
- Speed was critical and finance was delivered in under 6 weeks to secure the opportunity, and a potential £2m profit.
- Our client used an unencumbered derelict Hotel as security, to enable 100% of the purchase price to be raised.
- The pricing was 0.94% per month, with a 2% arrangement fee and no exit fee.
- The agreed exit was a refinance onto a development loan, once planning permission had been granted.
Contact Sean Crombie for the latest pricing, products and terms on offer by completing this enquiry form.