£3.5 Million Bridging Loan For A Property Developer

• Client: Property development team
• Property Type: Derelict care home on a large plot of land
• Property Value: £5,250,000
• Loan Amount: £3,500,000
• LTV: 70%
• Product: Unregulated bridging loan
• Interest: 9% per annum, part rolled and part serviced
• Term: 18 months

Enness was approached by an experienced property development team seeking approximately £3.5 million of bridging finance to acquire a vacant care home in London. The property was valued at £5.25 million and occupied a substantial plot of land, presenting the developers with several potential opportunities.

The original plan for the site had been to redevelop the care home into a residential housing scheme, reflecting the significant shortage of housing stock in the area. However, having extensive experience across the property sector, the development team identified another opportunity. Rather than disposing of the existing care home use entirely, they recognised continued demand for specialist care in the area and identified an established care home operator that was prepared to lease the property once refurbishment and extension works had been completed.

The time-sensitive nature of the acquisition meant that securing finance quickly was critical. Competition for the property was strong, and the developers needed funding within the required timeframe to proceed with the purchase. Enness therefore approached specialist bridging lenders capable of considering the value of the property, the experience of the development team and the proposed plans for the site.

Enness sourced an unregulated bridging facility of £3.5 million, representing 70% LTV against the £5.25 million property value. The facility was structured over an 18-month term, with interest split between serviced and rolled-up payments to provide an appropriate balance between cash flow and overall funding requirements. The interest rate was 9% per annum.

Given the urgency of the transaction, speed was a key consideration throughout the process. Following receipt of the valuation, Enness arranged the funding within ten working days, allowing the development team to complete the £5.25 million acquisition and secure control of the site.

Following the acquisition, the developers progressed plans for the property while also exploring the wider potential of the site. They submitted proposals to the local authority to develop new homes on part of the land, helping to address local housing requirements, while continuing with plans to refurbish and extend the care home for the identified operator.

This case demonstrates how bridging finance can provide experienced property developers with the speed and flexibility required to pursue opportunities where conventional finance may not be suitable within the required timeframe. By structuring the facility around the asset and the proposed repayment strategy, Enness helped the client secure the property while progressing a broader development and refurbishment strategy.

Important: Bridging finance is short-term borrowing and requires a credible and achievable repayment or exit strategy. Where repayment depends on development works, planning decisions or a future sale or refinance, delays, unexpected costs or changes in property values may affect the anticipated exit and the overall cost of borrowing. The rate referenced in this case study relates to a specific transaction and is not indicative of current or future pricing.