Interest rate – 0.9% per month
Arrangement Fee – 2%
Exit fee – Nil
Term – 12 months
Our client had a strategy of acquiring closed-down pubs with conversion or development potential.
They had managed to negotiate most of their purchases on a “subject to planning” basis. However, on this deal, they needed to buy unconditionally or faced losing the property.
The client required a highly geared loan than this, otherwise would not be able to commit to the purchase.
Typically the Bridging Finance marketplace offers up to 60% ‘gross’ on this kind of asset, meaning that the ‘net’ loan, after interest & arrangement fee retention, would be significantly lower.
A lender was sourced who had an appetite to go to 75% Loan to Value NET, also allowing the client service interest monthly (which the client could clearly demonstrate they had the income to do), as opposed to retain it for the full term.
The client was able to acquire the property based on that finance deal and latently obtained planning consent to convert the property into a residential dwelling for Holiday Let purposes.