Commercial Bridging Loan for Vacant Property Purchase in London

In this case study, Positive Commercial Finance arranged a Commercial Bridging Loan for Vacant Property, enabling our clients to complete the acquisition of a former Day Centre in London while they explored plans to maximise the property’s future value.

The Opportunity

Our clients identified a detached commercial property in London that had previously operated as a Day Centre under D1 planning use.

The building had originally been constructed as a public house many years earlier, but had fallen into poor condition and was being sold with vacant possession.

The property was not immediately suitable for letting, meaning a traditional commercial mortgage was not appropriate. Instead, the clients required short-term finance to complete the purchase and allow time to progress their future plans.

The Challenge

The main challenge was securing finance against a vacant commercial property with no existing rental income.

The clients also wanted to enhance the property’s value by pursuing further planning opportunities. The previous owner had already obtained planning consent for residential conversion, but the clients believed there was potential to improve the scheme further.

Therefore, they required a flexible bridging facility that would:

• Provide a high level of funding against the property value.
• Allow time for additional planning work.
• Avoid unnecessary costs that could reduce available borrowing.
• Maintain flexibility through the development process.

Our Solution

We approached lenders experienced in providing commercial bridging finance for vacant properties and identified a lender comfortable with the proposed strategy.

The chosen lender provided a competitive facility with the option for interest to be serviced monthly rather than retained. This helped maximise the net loan proceeds available to the clients.

Deal Structure

• Loan Amount: £595,000
• Loan to Market Value: 67%
• Loan to 90-Day Value: 85%
• Interest Rate: 0.71% per month
• Arrangement Fee: 2%
• Exit Fees: None
• Term: 12 months

The Result

The bridging facility enabled the clients to complete the purchase of the vacant commercial property and provided the necessary time to progress revised residential plans.

The loan structure offered flexibility, with no early redemption penalties or exit fees, allowing the clients to move forward with their planning strategy without unnecessary restrictions.

The clients are now developing proposals for an enhanced residential scheme, which they expect will improve the property’s overall investment potential.