A client recently returned to my services (having previously mortgaged a property in Bath), to secure a bridging loan for his property portfolio. This client is an international developer, who owns one of the largest building companies in Europe, constructing shopping centres internationally, from Prague to Kenya.
My client was dealing with some temporary cash flow issues, so was looking to borrow extra funds. He owned a family portfolio of holiday homes in the far South-West of England, which consisted of 9 properties on freehold with a value of £6.5 million (as well as his own beach).
Despite my client’s wealth, there were certainly a few challenges along the way. Firstly, my client does not live in the UK – he probably spends more time flying than on land – so lenders were unable to pin down a proof of address. He also received income from a variety of sources, in a variety of non-sterling currencies, which is generally not acceptable for financing in the UK.
Another difficulty with the case was the location of the portfolio. As it was not a London or city asset it was perceived as risky security in the eyes of a lender, due to potential low demand should the lender have to take possession and sell the properties. Equally, the portfolio was undervalued slightly, which spooked one lender I had interested, and caused them to back out completely due to the uncertainty of security in this location.
This happened on a Friday, but with my professional expertise I was able to replace the deal quickly with another lender that very Bank Holiday weekend. I was able to make the introduction between lender and client efficiently, communicating well to ensure both client and lender were happy to work together. This lender was actually a Barrister, looking to lend money on a short-term basis to receive more interest on his income than it would simply sitting in a bank. By using this efficient and exclusive lender, in combination with my usual highly-effective solicitor of choice, the deal proceeded to fully complete by that Wednesday!
The nature of this lender, which was made up of the top barristers in the country, allowed for excellent security, as well as being more willing to take on cases with riskier criteria, based on the fact there would be no problem paying back the loan.
I was able to secure a bridging loan for 12 months on my client’s property portfolio at a comparable rate to the original offer, yet with terms that turned out to be much more favourable than before and allowed for greater borrowing and flexibility for my client.