Major deal saved from collapse after Brexit
Major deal saved from collapse after Brexit

Major deal saved from collapse after Brexit

UK Property Finance saved a large development loan deal from collapsing after a well-known bridging lender pulled out at the last minute.

The loan was required to complete two projects: the conversion of a redundant textile mill into 150 high-quality student pods, and the conversion of a second mill into residential accommodation.

The loan was progressing well, but builders had warned that they would walk off the student pods project if funding was not available on the exact date when construction was due to begin.

Pressure was also increased by the fact that the development needed to be ready in time for the next academic year, otherwise the company’s reputation within the student letting world would be damaged.

The Brexit decision then saw the deal take a turn for the worst as UK Property Finance began to hear rumours that the chosen bridging lender had lost vital US-based funding lines.

UK Property Finance claimed the lender was contacted on numerous occasions and reassured the broker that the loan was still ok.

However, on the day before completion, the lender allegedly admitted the rumours were true and funds weren't available to complete the deal.

“Our client was devastated with this news,” said Gary Latham, managing director at UK Property Finance.  

“He had spent many thousands on valuations and legal fees and the loan application had been withdrawn not because of the project, but because the lender had run out of the money required to fund.”  

The complexity of the case meant that a new lender was unlikely to be found within the tight timeframe. 

Fortunately, UK Property Finance’s in-house lending sister company UK Bridging Loans was able to step in after carefully reviewing the case and provided the short-term cash flow required until a larger loan could be obtained to repay the bridge and finance the development of the second mill.

“Our team worked throughout the evening and following morning to complete our underwriting requirements,” said Gary.   

“The valuations had already been performed and legal work completed, so we were able to fund the client within 24 hours, thus preventing the development [from] ceasing.”

Speaking of the client’s satisfaction regarding the outcome, Gary added: “Our client was overjoyed with the way UK Property Finance and UK Bridging Loans rectified what would have been a catastrophic scenario, not of his making, and he has already earmarked another similar project for us to fund due to his confidence in our service.” 

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