Utilising bridging finance to cover the final stretch of a property purchase

case study permitted bridging loan last stretch

Loan Amount:
£550,000

Property Value:
£2,200,000

LTV:
25%

Property investors often utilise bridging loans to cover the bulk of a purchase. But sometimes, specialist finance may just be required to overcome the final hurdles of a deal. An investor, looking to purchase a residential property, planned to use their business funds and savings to pay for the majority of a property.

Funding was required from us to cover the shortfall. They planned to utilise the property for its rental potential. But, before the funds could be issued, our underwriter had to address a few issues.

Certain red flags emerged during the background checks, and we had to move quickly to find solutions.

Putting plans in place to address some red flags

When we began our background checks, we discovered some adverse credit in the client’s financial history. While this may have derailed an application with a high street bank, MFS prides itself on flexibility. We understand that few will have a perfect record to their name, and this shouldn’t halt their property investment plans.

Our underwriter addressed the adverse credit incidents and put a plan in place to overcome them so we could progress with the deal. Also, as we moved forward, we noted that some of the property certificates were not entirely up to scratch.

Again, rather than let this hold the borrower back, we created a strategy so this would be rectified swiftly, we did this by working with the borrower to organise new inspections of the property so that we could again move forwards.

With a solid exit strategy clearly in place, along with the previously mentioned assurances, we were happy to issue the funds.

Specialist finance can help with real economic circumstances

CCJ issues, bankruptcies, IVAs and the like are likely to have impacted many property investors in recent years. Covid-19 and its effect on the economy led many to fall behind on their bills.

What’s more, mainstream lenders are struggling to bounce back. Mortgage approvals fell to the lowest level seen since the start of the pandemic in late 2022.

It’s clear a lot of work needs to be done to restore confidence in the property market. Fortunately, while we’re facing an uphill struggle, specialist finance will be there to support property investors. From refurbishment loans through to developer exit bridging finance, there are plenty of options available to worried property investors.