Recognise Bank has provided a £231,000 commercial bridging loan for the acquisition of a vacant commercial property in Bristol, arranged through specialist finance broker Word On The Street.
The facility was structured for a newly formed special-purpose vehicle purchasing a former family business premises. The property had been owned by a family member and used as trading premises before becoming vacant.
Loan structure and terms
The twelve-month bridging loan was agreed at 70% loan-to-value based on market value, representing 77% of the purchase price. Interest has been retained within the facility.
The borrower plans to seek planning permission to convert the property to residential use. Indicative development finance terms have been arranged should planning consent be granted. If planning permission is refused, the property will be let and refinanced onto a commercial term mortgage.
Title complications
The property was subject to restrictive covenants on the title, which were identified during the initial assessment. The lender worked with the broker, solicitors and valuers to address these issues.
Heather Mitchell, lending manager at Recognise Bank, said: “The client had a well-considered plan for the asset, but the transaction required a lender willing to assess the wider context, including the planning strategy and the position on title, rather than treating it as a straightforward purchase.”
Ben Hartley, specialist finance broker at Word On The Street, noted this was the first transaction he had introduced to Recognise Bank. He said the lending team “understood the risks attached to the planning strategy, and were clear on what was needed to progress the deal.”
The transaction represents a bridging loan structured to accommodate planning uncertainty, with alternative exit routes built into the financing arrangement.