Bridging loan for retired gentleman planning development

THE SCENARIO

I was recently contacted by a client’s daughter, acting on behalf of my client, who wished to arrange a bridging development loan in order to carry out a building project which he had already outlined the planning for. My client was a retired company director, recently divorced and with a very healthy pension.

My client had a piece of land in the English countryside which had recently been valued by one of our trusted partners at £350,000. The land was sizeable at well over 20 acres and complete with a lake. Land like this is a very good commodity to have, it offers significant potential whether for residential or business purposes and my client was very excited to get his plans underway.

Owing to my client’s recent divorce, the marital home had been put on the market in rapid fashion and valued at £1.6million which would provide the exit to my client’s bridging loan. My client was looking to raise around £93,500 to carry out his building project and naturally came to Enness due to our reputation for finding the best deals available on the market.

I approached a lender with whom I have an excellent relationship with, having worked with them in the past and explained my client’s situation. The lender was willing to offer terms within a retained loan structure. This essentially means that all the capital is paid back at the end of the term, including interest payments which suited my client well due to his clear exit strategy.

Everything was running smoothly until the deal neared completion. The lender had already transferred my client’s solicitor the bridging development loan amount but realised that instead of transferring the agreed retained loan, transferred a serviced loan. This posed an issue because it could have led to lengthy transfers of money to and from the lender to solicitor, which would really have thrown a spanner in my client’s plan.

Luckily, I was able to speak with the lender and recommend that only the difference was transferred back to the lender. This was accepted and we were able to progress with the deal as planned, overcoming what could have been a significant hurdle.

Needless to say, my client was still offered the best rate on the market. The full bridging development loan amount of £93,500 was offered at a rate of 1.25% over a period of 12 months on a retained interest basis. My client cannot wait to realise his building project and looks forward to working with us again in the future.





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