Bridging finance is one of the fastest ways to raise liquidity quickly. While borrowers can use these loans for various purposes, they can be most useful when individuals need to access the capital to complete a property purchase quickly against a tight deadline – in many cases, just a few weeks.
In this case, an individual looking to acquire a property in Jersey approached us to help them source short-term finance. The client contacted us on a Monday with an urgent requirement to have capital available to them by Friday of the same week to ensure the purchase could go ahead. The client was looking to raise £1.25 million, representing 89% loan-to-value (LTV) but 100% of the agreed sale price and complete the transaction in just five working days. Sourcing a lender that could offer such a high LTV (bridging loan lenders prefer to offer slightly lower LTV, given the nature and use of funding) against such a short timeline was one of the biggest challenges in this case, further compounded by the fact that if the client couldn’t access the capital they needed, they faced losing their property. To give additional comfort to the lender, a friend of the borrower offered a personal guarantee for 33% of the value of the loan.
While we can arrange bridging loans quickly, completing a transaction of this size in just a few days is complex. We can usually source rates and terms within 24 hours, the legal process required to complete the deal can take a little longer to come together, which sometimes delays the finalisation of the property purchase. The Jersey legal system requires property transactions to complete in the Jersey Royal Court each Friday, and therefore all documents relating to the purchase should be in agreed format by the Wednesday so that the contracts can be passed before the court.
Our Jersey team used their personal relationships with different lenders and institutions to source a bridge loan for the client for the required amount. Once we had arranged the most competitive terms for the client, we liaised with the other parties involved in the deal to ensure the legal side of the process – including the court – ensuring we could support the completion of the transaction in time. We delivered the deal by the deadline required by the client, ensuring they had the capital they needed to complete the purchase and they wouldn’t lose their property.
If you are interested in understanding more about how you can use bridging finance to complete property transactions quickly – in Jersey or abroad – get in touch. The team will talk you through possible LTV, rates and terms, timescale and the process to give you more insight and help you understand your options.
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