Business owners acquire property with commercial bridging loan

Client Circumstances

We were contacted by clients seeking to acquire a commercial property in Harrow and required a bridging loan of £312,000 to achieve this.

As well as being experienced portfolio landlords, the clients had operated a business from the commercial property for several years, including the upper floor used for storage. With the property becoming available for purchase, the clients were immediately interested in acquiring it to maintain it as the ongoing location for their business.

With the option to convert the upper floor to a separate residential property available to be let out, the clients would have some flexibility on their use of the property depending on their business needs.

Our Solution

As we were familiar with the clients, we already had an awareness of their experience and existing portfolio, making the information-gathering process a little easier. After learning of any changes in the circumstances, it was important to consider the property they wanted to acquire.

Given they had been renting the property for several years for commercial purposes, they had a pre-existing landlord & tenant relationship with the party selling the property. With this in mind, the purchase could not be considered an arm’s length transaction. In this circumstance, it is vital to obtain an accurate valuation before proceeding and to ask for more information on the agreed price if necessary.

After assessing the property, our valuation partners determined that the price agreed by the seller and the client was the fair market price for the property. They did not highlight any other areas of concern.

With the clients’ plan to exit our loan through refinancing onto a longer-term commercial loan seen as appropriate, we were happy to approve their application for bridging finance.

The Benefits

The clients completed the purchase of their desired commercial property after successfully obtaining bridging finance from KSEYE. This gave them an additional level of reassurance over the ongoing location of their business and reduced their regular outgoings due to no longer renting the property.

While commercial bridging loans are more specialist than other forms of bridging finance, and they carry a slightly higher level of risk to lenders, we assess each application on its own merits. When considering an application for a loan where the client has an existing property portfolio and well-established business, some of that risk is mitigated.

Learn more about the rates and business types we can provide finance for on our dedicated Commercial Bridging Loans page.