Bridging Finance to Purchase a Closed Public House

Positive Commercial Finance specialises in arranging Bridging Finance for Commercial Property, helping investors move quickly when opportunities cannot wait for planning approval. This case study explains how we helped an experienced developer purchase a former public house with strong redevelopment potential.

The Investment Opportunity

Our client had built a successful strategy around acquiring closed public houses with potential for conversion or redevelopment.

In most cases, purchases were agreed subject to planning permission, reducing the developer’s risk before committing to the acquisition.

This opportunity was different.

The seller required an unconditional purchase, meaning the client had to complete before obtaining planning permission or risk losing the property altogether.

The client therefore needed fast, flexible funding that would allow them to secure the site immediately.

Finding the Right Bridging Lender

Most bridging lenders would only advance around 60% gross loan-to-value on this type of commercial property.

Once arrangement fees and retained interest were deducted, the amount available would have been too low for the purchase to proceed.

Positive Commercial Finance identified a specialist lender with a more flexible approach.

The lender agreed to provide funding at 75% net loan-to-value, significantly increasing the funds available at completion.

Rather than retaining interest for the full loan term, they also allowed the client to service the monthly interest payments, which reduced the amount deducted from the initial advance. Because the client could clearly demonstrate sufficient income to meet these payments, the lender was comfortable with this structure.

Deal Structure

• Loan to Value (LTV): 75%
• Interest Rate: 0.9% per month
• Arrangement Fee: 2%
• Exit Fee: None
• Term: 12 months

The Result

The client completed the purchase within the required timescale and secured the former public house before it was sold to another buyer.

Planning permission was subsequently obtained to convert the building into a residential holiday let, allowing the client to implement their investment strategy and add significant value to the property.

This case study demonstrates how specialist Bridging Finance for Commercial Property can help developers secure opportunities quickly, even when planning permission has not yet been granted.