Bridging Loan for HNW Client of a Corporate Trustee
1st August 2022
Key Facts:
- Introducer: Swiss Corporate Trustee
- Client: HNWI, non-UK resident
- Scenario: The borrower was a HNWI with an interest-only mortgage coming to an end. They needed to pay off the mortgage via a short-term loan and asked their trustee to arrange this for them
- Requirements: A competitive rate, pay off the interest-only mortgage in full without entering into a new mortgage arrangement. The trustee was under time pressure to deliver a financing deal, given the mortgage had to be repaid in just a few weeks.
- Property: Trophy property, London, £9 million (40% LTV)
- Loan details: Bridging loan of £3.53 million at 0.48% per month, term up to a year, No AUM, rolled-up interest to facilitate the client’s cash flow
Advisers are increasingly seeking out bridging finance for their clients, given these loans can be used in various financing scenarios. Your clients can draw down funds in a couple of weeks, meaning they are an excellent way to raise liquidity quickly.
A Swiss-based corporate trustee approached us as they needed to raise finance to help their client pay off an interest-only mortgage in the UK. The client wanted to sell the property in the short term and didn’t want to take on a traditional mortgage, given they would incur early repayment fees. The client, a busy and very successful company owner, wanted the trustee to handle the property finance so they could focus on running their business, which they were growing aggressively due to increased demand for their product.
The trustee had explored borrowing via private banks but found the financing products were not ideal given their client’s timeframe for selling the property. Simultaneously, arranging finance to repay the mortgage was taking a long time. With the deadline approaching, the trustee was concerned about not being able to finance the exit of the mortgage in time. The client was a high-net-worth individual but had little liquidity to pay off the current mortgage, and finance was a fiscally advantageous route.
When the Swiss trustee approached us to help, we knew that bridging finance would be an ideal solution in this case. The brokering team secured the loan amount at a very competitive rate of 0.48% per month, and we completed the entire transaction within five working days. The client was only required to provide minimal information surrounding their circumstances and no income or expenditure information was needed. Enness had explained how the client planned to use the property sale to repay the loan. Given the property was being marketed by a very reputable estate agent, with significant interest being shown by potential buyers, the lender was satisfied with this exit plan supported by the client’s overall wealth.
The client was delighted with the outcome and particularly grateful to the trustee for arranging finance so quickly and in a way that meant they didn’t need to go through a complex loan application process.
