£975,000 bridging loan refinances Cheshire holiday let

Recognise Bank has completed a £975,000 bridging loan to refinance a residential property in Cheshire and release equity, giving the borrower room to restructure their finances before securing longer-term funding.

The property is a large residential house with a swimming pool, which currently operates as a short-term holiday let and serviced accommodation. The borrower owns and lets property, and needed funding to refinance existing borrowing and consolidate unsecured debts and family loans after a change in personal circumstances.

Paul Mak of broker Pomegranate Commercial Finance introduced the case. Recognise Bank agreed the 12-month bridging facility at 75% loan-to-value (LTV), with interest retained for the full term.

The bridging loan allows the borrower to address existing financial commitments and improve their credit profile. The borrower intends to refinance onto a longer-term holiday let or buy-to-let mortgage once their financial position has stabilised.

The exit depends on that improvement in credit profile. Recognise Bank assessed the underlying property security and the borrower’s refinancing plans before structuring a short-term facility to fit their requirements.

“Not every lending decision can be made by looking at a borrower’s current financial position in isolation,” said Heather Mitchell, lending manager at Recognise Bank, who worked with the introducing broker to progress the transaction (pictured).

“In this case, it was important to understand the circumstances behind the funding requirement, the strength of the underlying property and how the borrower intended to move towards a longer-term solution.

“Bridging finance can provide valuable breathing space where there is a clear purpose for the funding and a credible exit strategy. By taking a practical view of the overall case, we were able to provide a facility that gives the borrower an opportunity to put their finances on a more sustainable footing.”

“This was a case where understanding the client’s wider circumstances was particularly important,” noted Mak. “The immediate priority was to secure a facility that would allow them to address their existing commitments while retaining the flexibility to refinance when their position improves.

“Recognise Bank approached the application with a clear understanding of what we were trying to achieve. Heather and the team were willing to look at the full picture, which made a real difference in finding a suitable solution for the client.”