The deal in a nutshell
The deal involved a bridging loan in excess of £1 million on prime real estate property in Chelmsford. The loan was for a client with a sizeable property portfolio who needed our expertise to rescue a deal.In effect, this was a “re-bridging” arrangement as the borrower was concerned that the original bridging lender could not offer the necessary flexibility and expertise.
The loan has a two-year term, although the client’s exit plan envisages moving onto longer-term finance later in 2024.
We picked this up at short notice, and a prompt loan decision was required due to an ongoing lease dispute that had prompted the original bridging lender to withdraw from the deal.
Key features of the bridging loan
- Gross loan amount – £1.07 million – 67% loan to value (LTV)
- Refinancing focus: Chelmsford prime shopping district
- A demonstration of the versatility of bridging finance, as negotiations over the lease agreement are ongoing.
The client’s exit strategy
One key consideration when we look at when providing bridging finance is the client’s planned exit strategy.
A key issue in relation to this particular bridging deal is that the client is currently negotiating a new lease agreement on the property.
The client intends to refinance to a traditional term facility once the new lease is put in place with the leading high street bank who is the current lessee.
Our commercial bridging expertise in action
We specialise in providing bridging finance in circumstances where, for a variety of reasons, clients may not be in a position to access long-term financing through a bank, and – as a result – are looking for a short-term financial solution to allow a commercial proposition to proceed.
Having the required capital available enables borrowers to remain financially agile and avoid expensive long-term financing solutions that can have a potentially detrimental effect on their cashflow and balance sheet.
We can arrange bridging finance on a range of commercial properties, including new build, and often don’t require any previous trading history. Furthermore, should the asset reach stabilisation sooner than expected, we don’t charge exit penalties for early refinance.
In this instance, the property is subject to ongoing legal negotiations with court instructions in place to strictly manage the timescales of the new lease being agreed.
We have taken steps to protect our interest – the borrower is providing us with updates as the new lease is progressed to the reporting schedule instructed by the court.
If the borrower and lessee are unable to reach a satisfactory outcome, we will be able to step in under the agreed terms of the bridging loan to agree a lease and sell the property.
Get in touch
We are committed to providing our clients with flexible and tailored bridging finance solutions. Please don’t hesitate to get in touch to understand more about how we can help.
To find out more, speak to the Business Development Manager in your local office.
Beyond Bridges: The next step for borrowers and investors
“This expansion in Ortus’ product range is part of our ongoing effort to serve our loyal clients and introducers. We have had a particular focus on commercial property since our inception and providing 5-year commercial loans was the next logical step in growing our offering. This product now enables us to help borrowers and investors for the next step beyond a bridging or acquisition loan.”
