Bridging Finance | Posted May 1, 2020

Providing Stability Through Unprecedented Times

Earlier this year, we were approached by a client who was coming up to the end of the term of their existing development facility, which was used on a site of 13 individual bungalows. Unfortunately, due to delays on the site, only 4 of the bungalows had sold, meaning there was still an outstanding balance of £755,000 to repay.

What were the client’s objectives?

The client required additional funding of £1,127,100 to pay off creditors and finish the remaining minor works that needed to be completed on the site.

It was important that the client gained access to the finance quickly and as such, requested that we identify a lender who could offer a competitive rate to be completed within a tight timescale. The client needed this so that they could finish essential work on the site and continue with the selling of the remaining bungalows.

What financial solutions did we offer?

As a specialist financial broker, we were able to search the market for a lender that could provide the finance within the tight timescale needed.

The lender confirmed that they could get the facility sorted quickly and release full funds on day one, so that the work on the remaining bungalows could be completed and sold as soon as possible.

Unfortunately, on the day of expected completion, the coronavirus pandemic meant that the lender had their funding lines paused. As such, they were not able to honour the agreement, even though all legal points had been satisfied. This would have meant that the client was going to go into default on their existing facility.

Fortunately, as bridging finance specialists, our experts at Finance 4 Business were able to quickly identify a lender that remained active in the bridging market. Working with Atelier Capital Partners, who are a short-term property lender, a deal was presented and the terms provided extremely quickly and efficiently, with Atelier and Finance 4 Business working hard to ensure client satisfaction.

We were also able to negotiate with the existing lender to not charge any extension fees as the client had gone over term, saving them almost £55,000.

How did we ensure success?

Our strong relationships with Atelier meant that we could streamline the communication processes after the original deal could no longer be fulfilled.

With surety and confidence in Atelier delivering as the agreed lender, applications were raised, signed and returned within a couple of days. Working with us, Atelier was both able and happy to help the client during these unprecedented times, providing access to the financial support the client needed swiftly.

We agreed a retype of the valuation of the site and Atelier allowed existing IMS Lending to be used, even though they were not on the panel. All parties were able to work closely together to achieve the deadline, with difficult complexities such as extension fees ironed out during the process.

The trust built with the lender through our previous work with them enabled us to provide evidence for the client’s capability, even during difficult times, to ensure that the bungalows would be completed and eventually sold.

Although not without its complications, we worked with Atelier and the relevant solicitors tirelessly to get the new facility put in place before the next months interest payment was due.

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