- Client: UK national and resident
- Property Value: £2.6 million
- Loan Amount: Circa £940,000
- Purpose: Business capital
- Structure: Second-charge bridging loan
Enness was approached by a UK entrepreneur who needed to raise approximately £940,000 against a property valued at £2.6 million. The funds were required to meet capital commitments within the client’s business, making speed an important consideration.
The property was jointly owned, and ongoing litigation between the parties added complexity to the proposed borrowing. Both owners needed to consent to the loan, while the lender also wanted to ensure that each party fully understood the implications of granting a second charge over the property.
The lender was prepared to proceed but required one of the parties to obtain independent legal advice before the transaction could move forward. This created an additional step in an already time-sensitive process, requiring close coordination between the client, the other property owner, the lender and the respective solicitors.
Enness took responsibility for keeping the different parties aligned and ensuring that the lender’s requirements were addressed promptly. By coordinating with the solicitors and making sure the independent legal advice was obtained without unnecessary delay, we were able to keep the transaction progressing.
A second-charge bridging facility of approximately £940,000 was subsequently secured against the property. The funding provided the client with the capital required for their business while allowing the existing property finance arrangements to remain in place.
The case demonstrates how second-charge finance can provide an additional source of capital where an existing property is already financed. It also highlights the importance of careful coordination when joint ownership, legal proceedings and additional legal requirements form part of the transaction.
For borrowers with substantial property equity, a bridging loan or second-charge structure can sometimes provide a way to access capital without refinancing the existing first charge. The most appropriate option will depend on the property, existing borrowing, intended use of funds and lender criteria.
If you or your clients require short-term finance against an existing property and have a more complex ownership or legal situation, speak to a mortgage specialist to discuss your requirements.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, underwriting, valuation, legal due diligence and lender criteria. Bridging finance is short-term borrowing and may carry higher costs than conventional mortgage finance. Second-charge borrowing is secured against property and failure to meet repayment obligations could put the secured property at risk. Where legal proceedings or joint ownership are involved, independent legal advice may be required.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
