Bridging Finance Exit – mixed use pub with 6 flats

The Client: 

The application was put through in joint names for two Foreign Nationals. Both clients resided in the UK on working visas.  

The Scenario: 

The applicants had previously purchased a mixed-use pub/residential property on a Bridging loan. They had refurbed it and brought it up to a high spec. Pubs are difficult to finance generally, and the flats above are broken up in to 3 x 1 beds and 3 x studios of which some are under 30sqm. The pub was leased and achieving regular rent, and the flats had been let to an agent with guaranteed rental scheme on a 2-year agreement.  

The Solution: 

Being a whole-of-market Broker, we had the knowledge that some lenders will consider pubs up to a certain loan to value, typically 60%. We also understand that some lenders will accept flats smaller than the usual 30sqm rule, and on top of that will allow 2 year leases on a guaranteed rent scheme. We covered the exit off the Bridging loan and raised some extra capital on top which allowed the client to reinvest.  

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Summary: 

It is possible to get lending on extremely complicated setups and situations that would seen as undesirable to most lenders.   

Key things to consider for Expat / Foreign national income: 

• Some lenders will accept Foreign Nationals. 

• Some lenders will consider pubs up to a certain loan to value. 

• Some lenders will allow lending on flats smaller than 30 sqm. 

• Some lenders will accept 2 year leases direct to management companies/agents on a guaranteed rent scheme

If you have any questions about Commercial Finance, contact us today to speak with our CeMAP certified Mortgage Advisors at 0113 8730 740. Alternatively, complete this short online form for a callback.