The popular Bridge Doctors facility on Bridging and Commercial has seen a recent success – after an enquiry posted to the panel of bridging experts led to the deal being funded.
Watford-based bridging lender Cheval stepped in when a broker contacted Bridge Doctors at the end of October, looking for a bridge for his clients – a couple in Cheshire who were in the process of being made bankrupt.
The couple faced bankruptcy as a result of business debts owed to a number of creditors, including HMRC, and their bank overdraft facility had been cancelled, placing them under significant financial strain.
The broker asked the Bridge Doctors for advice, stating: “This will only be short term finance. The bridge is required in order that an unconditional annulment can be obtained prior to the release of equity release funds. This is a requirement that has been put in place by the equity release lender as a last minute requirement.”
Although the couple had an unencumbered residence worth over £1 million, they were unable to raise a mainstream mortgage as they had very limited income. However, after demonstrating they were able to raise a suitable equity release mortgage, Cheval stepped in to provide a bridging loan to annul the bankruptcy and settle their debts.
This enabled them to draw down on their equity release mortgage to repay the bridging loan.
Gavin Diamond, finance director at Cheval, said it was a case ‘tailor-made’ for bridging, adding: “It was a loan that made perfect sense, at a sensible LTV with a plausible exit strategy.
“There was sufficient equity for us to retain the interest for the period of the loan from the amount advanced to the borrower. It enabled the elderly couple to pay off their debts, annul their bankruptcy and, most importantly, remain in their home.”
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