MFS completed £6.6m bridging finance for North West shopping centre

North West shopping centre

Gross Loan Amount:

£6,600,000

LTV:

60%

Charge:

1st Charge

Initial Circumstances

A broker came back to us with an enquiry from a borrower that we had assisted earlier in the year. They needed fast bridging finance to secure a large commercial asset, a shopping centre located in Cheshire, North West England. Not only did they need a lender who could supply a large loan quickly, but they were also looking to complete the purchase via a company and a lender that they trusted.

Having already worked with this client, we had a good understanding on the types of properties they purchase. Most importantly, we knew of their capability and credibility when investing in these specific types of commercial properties.

The shopping centre was a mix of tenanted units, and larger than the previous asset we had provided bridging loans for. Whist some of vacant units may have discouraged other lenders, we trusted both our broker and borrower, based on their expertise within this filed.

MFS Solutions

To relieve the stress from the client, we supported the legal documentation and were able to understand the legal complexities. For such a large commercial asset, one element our underwriters take on is reviewing the leases and agreements of the current units. This helps relieve pressure and saves time of having to read through all the documentation – ensuring they feel supported. Whilst reviewing the tenancies, we discovered that the largest unit on the ground floor had a longstanding lease, until 2070. However, their remained a small concern, the company that occupied the lease for this unit had slowed trading. Whilst this provided a continuous income, it meant the commercial space may become unoccupied. Upon discussing the concerns surrounding this issue with the borrower, we were informed that there ongoing talks of a buyout between the parties. This amount was large enough to cover the bridging loan, providing an additional exit strategy.

There were also minor concerns over the age of the property, with regards to the structure and associated land. Here at MFS, we have a diverse valuation panel. By utilising this panel, we were able to find a valuer that had previous experience with these types of commercial properties. When we received the valuation report, we were comfortable that the asset remained a low risk. It had also recently been refurbished.

We met the given deadline, and the borrower was very happy with the speed and agility the underwriter completed on this North West bridging case. We look forward to working with them again. The initial exit strategy is long term refinance.

The Benefits

In complex cases that require large bridging finance such as these in North West England, having a previous relationship with the client creates a smooth process and an underlying sense of trust.

The borrower knew that that they could rely on us. We look at the bigger picture. By looking at the applicant, instead of singularly focusing on the property – we knew that asset would be a positive investment. The borrower came straight to MFS with this enquiry due to our speed, flexibility, and work ethics.

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