£5.2M 100% Bridging Loan Helps Investor Secure Commercial Property Portfolio

A £5.2M 100% bridging loan helped a property investor pursue the acquisition of a commercial property portfolio without contributing a conventional cash deposit towards the purchase. The proposed structure relied on additional property security to support the borrowing, subject to lender assessment and agreed terms.

Key Details

• Client: Experienced property investor
• Challenge: Acquiring a commercial property portfolio while preserving available cash for transaction costs and future asset management
• Loan Amount: £5.2M
• Facility Type: 100% bridging finance supported by additional security
• Loan Term: 12 months

Situation

The investor identified an opportunity to acquire a portfolio of income-generating commercial properties offered as a single transaction. The portfolio aligned with the investor's longer-term investment strategy, but the purchase required a substantial amount of capital within a limited timeframe.

Although the investor held equity in other property assets, using cash for a large deposit would have reduced the funds available for transaction expenses, property management and other investment commitments. The investor therefore explored whether a specialist bridging facility could support the acquisition through a structure based on additional security.

Challenge

The key challenge was arranging sufficient funding to cover the purchase price while meeting the lender's security requirements. A 100% bridging loan does not necessarily mean borrowing 100% of the purchase property's value without additional support. Depending on the lender, the structure may require equity in other properties or additional assets to provide suitable security.

The lender also needed to consider the portfolio's valuation, the investor's financial position and a credible strategy for repaying the short-term facility within the proposed term.

Solution

Global Bridging Finance explored a £5.2M bridging facility structured around the proposed acquisition and additional property security. The intended arrangement aimed to fund the purchase without a conventional cash deposit against the portfolio, subject to the lender's valuation, security requirements and final terms.

The proposed 12-month term gave the investor time to assess longer-term financing options, including refinancing the acquired portfolio onto suitable commercial investment finance. The exit strategy remained dependent on lender approval, affordability and the properties meeting the relevant refinancing criteria.

Outcome

The proposed structure offered a potential route for the investor to pursue the portfolio acquisition while retaining more cash for other commitments. By considering equity held in additional assets, the investor could explore funding beyond a standard deposit-based arrangement.

This case illustrates how 100% bridging finance may support certain property transactions when sufficient additional security is available. Such facilities are subject to lender criteria and can carry significant costs and risks. Borrowers should carefully assess the repayment plan, as a delayed sale or unsuccessful refinance could create a need for alternative arrangements and put secured assets at risk.

Find out more about the different bridging finance options available for property transactions.