The loan facilitated the purchase by the wife of 50% of the shares in the company in which her husband already owned the other 50%, thereby giving them complete ownership.
The clients’ home was used as security for the loan, but their expected repayment route was through the sale of a shareholding in another company.
The couple had plenty of equity in their home and said they would downsize, if it became necessary to exit the bridging loan, by selling their property rather than the shares.
Alan Margolis, Head of Bridging at UTB, said when considering a short term loan, there must be a critical focus on the exit strategy, and in this case, the borrowers were fortunate to have two exit routes available.
“However, it’s also worth remembering that whilst the lender will want to be satisfied that a viable exit is available, there is no compulsion for the borrower to repay by that route if a more preferable alternative becomes available within the term,” said Alan.
“Indeed, these particular customers may well find a third way to repay the facility without downsizing or selling their other shares.
“That’s one of the great attributes of short term secured loans. They are flexible on the way in and on the way out.”
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