A privately funded bridging lender has revealed the details of its third charge bridging product, following its recent launch.

B&C got in touch with Central Bridging Loans (CBL) in order to find out more about how its third charge and other bridging products functioned in a real lending situation. In order to shed light on CBL’s flexible offering, Chris Wilson, Director at CBL, told us about three notable cases from late last year…

New premises with a third charge

Client: Heart surgeon;
Value: £300,000;
Requirement: Funding for new premises despite encumbered security.

A medical professional in High Wycombe was looking to borrow £300,000 in order to expand his business through purchasing new premises.

He owned a property worth £2.8 million, located among 40 acres of land in High Wycombe, which had a first charge mortgage of £1.2 million borrowed against it. A sub-prime lender also held a second charge of £250,000 over the property.

CBL was able to lend the borrower £300,000, lent at a monthly rate of 1.7 per cent over a term of four months. The surgeon is also seeking to borrow a formal mortgage on the commercial property being acquired in order to redeem the bridge.

Speaking about the transaction, Chris added: “When considering third charge applications, we like a good ‘feel factor’ for the deal. This means we want to see a very strong exit and redemption strategy in place, together with a clear understanding of the borrower and their circumstances. If we're happy with the feel of the deal we can lend at even higher LTVs.”

Bankruptcy Annulment

Client: Property developer;
Value: £190,000;
Requirement: Bankruptcy annulment.

Mr B, a successful businessman, was left in difficult financial circumstances following the collapse of a property deal and was subsequently made bankrupt.

He approached CBL seeking a loan to annul the bankruptcy. We were able to arrange a loan of £190,000 over a term of four months secured against a number of investment properties, releasing the funds required to discharge the client’s bankruptcy.

This was a complex case involving a structured administrative and legal process with CBL, our solicitors, the borrower's solicitors and the court.

Mr B proceeded to sell an investment property in order to provide the funds to discharge the loan on time.

Urgent HMRC payment

Client: Self-employed businessman;
Value: £140,000;
Requirement: Dismissal of bankruptcy application.

Mr F, a self-employed businessman had received a tax demand from HMRC and was facing a PAB (pending action in bankruptcy) with a court date looming. He approached CBL and we were able to arrange a loan of £140,000 over six months secured on his main residence, which released funds to discharge the bankruptcy application.

The case involved complex administrative and legal processes with HMRC, CBL and our solicitors, in order to dismiss the application at The High Court. The application was dealt with speedily and CBL's solicitors were able to provide funds to HMRC before the court date.

Mr F then had the time required to sell two investment properties, which provided the funds to pay back the loan.

Speaking about these deals and the wider bridging industry, John Clifford, Managing Director at CBL, said: “Alternative lending such as bridging is now seen as a viable solution for short term finance needs.

“CBL has seen as significant rise in applications for some of the more unusual requirements, from raising capital to stave off a bankruptcy order, to settling tax demands.”