Bridgebank completes £2.3m debt forgiveness loan

Bridgebank completes £2.3m debt forgiveness loan



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Bridgebank Capital has announced the completion of a £2.3 million bridging loan advance which allowed a property investor to pay off their existing debt….

Bridgebank Capital has announced the completion of a £2.3 million bridging loan advance which allowed a property investor to pay off their existing debt.


The £2.3 million debt forgiveness loan was secured against a mixed portfolio of residential and commercial investment properties.

The bridging loan advance allowed the borrower to take up an opportunity to pay off its existing funding debt from one of the many banks currently looking to reduce its property book exposure and willing to take discounted settlement proposals.

The borrower’s existing mortgage facility term had expired and the bank was not prepared to renew the facility but had a desire to seek repayment and accept a discounted settlement. It was stated that the borrowers conduct on the account had been exemplary with no default on the facility terms, and the portfolio consisting of 32 properties was profitable and well managed, with virtually no void. 

Commenting on the loan, Carl Graham, who heads up the large loans team at Bridgebank, said: “We are seeing more of these larger debt forgiveness opportunities, and if the portfolios are performing and well managed, then we have the appetite to provide the bridging facility to allow property investors to take up these opportunities.

Carl added: “This is a very specific area that we are targeting with our introducers. The satisfaction from completing these type of bridging loans is that we materially impact on the businessman’s ability to instantly improve portfolio profitability.”

The debt forgiveness write off counted for a 25 per cent discount on the original debt, where the transaction managed to increase the portfolio yield on debt return by 4.4 per cent. This was a result of the reduced level of mortgage debt on the portfolio going forward. 

The introducing broker had secured indicative terms to refinance the portfolio onto long term mortgages, following the use of the Bridging Loan to secure the settlement transaction. 

Bridgebank’s ability to fund larger loans, co-ordinate the supporting Valuation and underwriting process and provide direct commercial advice and assistance in negotiations with the outgoing bank, allowed the borrower to successfully complete the opportunity and thereby materially increase his net income yields and business wealth going forward.  

 

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