We’re proud to support property investors progressing via a share purchase agreement (SPA) – given that their complexities could limit options on the high street. Businesses, and the partners within them, can set up SPAs to save on tax and admin, but where unexpected shifts in circumstance arise, it can lead to ugly roadblocks.
Business partners sometimes need to move on, but this is often easier said than done. If delays emerge, there can be unnecessary conflict. Say two partners – James and John – co-own a limited company that owns a portfolio of BTL properties worth £2.5m. James, via the underlying SPA, owns 60% of the shares of this company, and John owns 40%.
John, for any number of reasons, wants to exit the business and sell his shares to James for £600,000. The issue is that James does not have enough liquid capital to purchase the shares. This is especially problematic as James wants to wrap this up quickly so he can retain full control of the portfolio in order to refinance later with better terms.
High-street banks are unlikely to lend the funds needed to facilitate the purchase of company shares. An alternative will need to be found quickly to prevent John from selling to an external party. Also, James may not want to sell any assets to generate the £600,000 needed, meaning a short-term solution needs to be found.
A bridging loan could offer just the right solution for this. We could (so long as the wider circumstances worked with our criteria) secure a £600,000 bridging loan against the equity built up in the property portfolio.
James could then use the loan to buy John’s shares, and acquire the company in its entirety. In terms of the exit strategy, James could explore external options. The refinancing could take shape as either a BTL or commercial mortgage.
All this would allow for a clean shareholder exit, the avoidance of selling any actual properties to cover the payment, and leeway in securing long-term refinance.
FAQs
Can you lend against a Share Purchase Agreement (SPA)?
Yes, we can consider lending where a Share Purchase Agreement is in place. We understand that some property acquisitions can happen through the purchase of shares in a company rather than a direct property purchase. In these cases, we assess the structure of the deal, the underlying assets within the company, and ensure appropriate planning, legal, and financial due diligence is carried out. Our flexible approach allows us to structure funding around complex transactions, including SPAs, where security and exit strategies are clearly defined.
Can you provide a single loan secured across multiple assets?
Yes. We regularly offer facilities secured against diverse portfolios, residential, commercial or mixed-use, all in one loan. This approach simplifies repayments, enhances leverage and helps clients manage their holdings more efficiently.
What are your maximum loan limits for portfolio borrowing?
We can offer substantial borrowing capacity. For residential bridging, we lend between £100,000 and £50 million, with LTVs up to 75%. Large bridging loans across commercial or mixed-use portfolios can reach up to £15 million with the same LTV.
How quickly can you complete a loan on a large property portfolio?
Our streamlined process, driven by in-house underwriting and capital, backed funding lines and close relationships with valuers and legal teams, allows us to deliver funding within just a few days for typical bridging needs, even with sizable portfolios.
Are flexible interest payment structures available for portfolio loans?
Yes. We provide options such as rolled-up interest, part-pay structures, interest deferral or top-slicing, enabling borrowers to manage cashflow across multiple assets while still maximising LTV and investment flexibility.
