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Emergency Bridging Loan for Bespoke Commercial Development

Emergency Bridging Loan for Bespoke Commercial Development

The Client: An experienced and long-standing owner of two trading businesses in the car dealership and servicing industry. He owned three business premises in this sector across the North East.

The Properties: The client had purchased land near one of his existing showrooms, and had then secured planning permission to build a brand-new car showroom and vehicle serving facility on it. This new development was going to be completed to an exceedingly high specification, providing a huge boost to his business.

The Finance: Originally, the client’s existing bank had verbally agreed to lend the required £1.3million needed to complete the works. Based on this agreement, the client had started the development works using the business’ available savings on the new site.

Halfway through the works, the client returned to the bank, asking for the remaining £1.3million. Unfortunately, due to changes in the bank’s lending criteria for businesses in the motor sector, they were now unable to lend the money the client required, potentially putting a stop to the on-going works.

The client had started looking at other solutions to source the money, which involved sacrificing some of his personal finances to get the project completed when he was directed towards us. We then set about sourcing a short-term bridging loan which could be drawn down within 4-5 weeks in order to pay the contractors already on-site to complete the works.

The Challenge: Sourcing a bridging lender which would lend on a bespoke commercial development project that was already halfway through was very difficult, as it’s seen as a high risk. We had to approach over 15 lenders before we found one who would seriously consider it.

The Solution: We’d built a strong relationship with the client, and it was clear to us that he was an exceptionally good businessman, with accounts to support this. Having found a lender who was happy to consider providing the finance, we set up a direct meeting between them and the client. This went extremely well, as the lender could see that our client knew the motor industry inside out, giving them enough confidence to agree to the deal!

With the loan in place, works are now being completed on our client’s new showroom and servicing development, and we are working with him to secure a commercial mortgage as an exit from the short-term loan, once the works are complete. Here are the details:

Property Details

Development value: £3million

Loan amount: £1.3million

LTV: 43%

Rate: 0.95% per month

Term: 12 months

Lender arrangement fee: 1.5%

Application: Trading Ltd Company

Consultant: Paul Keddy, 01732 471655


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Mortgages for Business Ltd is authorised and regulated by the Finance Conduct Authority (No. 313537) to transact regulated mortgages. We are a credit broker, not a lender. We work with the whole of market in sourcing a lender for you; we may receive a commission from the lender, and this amount varies between lenders. The FCA does not regulate some investment mortgage contracts. Mortgages for Business Ltd is a founding member of the National Association of Commercial Finance Brokers, the body that promotes best practice within the commercial finance industry. Telephone calls may be monitored or recorded for training purposes.