£120K Finishing Exit Loan to Complete Commercial-to-Residential Conversion

A property developer in East Sussex needed short-term funding to complete a commercial-to-residential conversion, enabling a refinance onto a buy-to-let mortgage once works were finished. With most of the heavy lifting already completed, the funding requirement was focused on the final stages of the project rather than a full redevelopment.

Clifton Private Finance helped the client secure a £120,000 unregulated bridging loan to complete the remaining work on the property. The funding was delivered within one month, keeping the project on schedule.

The Scenario

The client had purchased a commercial unit for £100,000 and invested a further £200,000 into the conversion prior to approaching us. The building was fully watertight, but still required meaningful work to reach completion.

The project consisted of three self-contained flats:

• Two flats were at second fix stage, requiring final finishes
• One flat was at first fix stage, with more substantial works still outstanding

This was very much a finishing exit, once the final works were completed, the client planned to refinance the property onto a buy-to-let mortgage.

To get the scheme over the line, they required £120,000 to complete the build and move into the long-term lending phase.

Challenges

Although the loan-to-value was low, the case still presented some technical considerations:

• A significant amount of capital had already been invested, meaning the lender needed confidence that the remaining works would deliver a mortgageable asset
• The development was at varying stages of completion, which required careful explanation to underwriters
• The lender required a long-form valuation, a much more detailed report than a desktop or short-form valuation, typically taking a couple of weeks to complete

The valuation needed to clearly assess the current condition of the property, the remaining works, and the viability of the refinance exit.

The Solution

We sourced a bridging lender comfortable funding light-to-medium refurbishment projects with a refinance exit, even where a large proportion of the build costs had already been incurred.

The loan was secured against the subject property, valued at £240,000, resulting in a low LTV, which helped secure strong terms. Although the lender offered a drawdown facility, the client opted to take the full loan amount upfront to maintain flexibility and avoid delays during the final stages of the build.

A long-form valuation was instructed to provide the lender with a comprehensive view of the project and its progress. Despite being more in-depth, this ensured the lender was fully comfortable with the risk and the proposed refinance strategy.

The Outcome

The loan completed within one month from application to funding, which is a strong turnaround given the valuation requirements.

The client secured the funds at a competitive rolled-up rate of 0.64% per month, enabling him to complete the remaining works without cashflow pressure.

As a result, the client was able to:

• Finish all three flats to a mortgageable standard
• Progress onto a buy-to-let refinance as planned
• Protect the substantial capital already invested in the project

This case demonstrates how bridging finance can be used effectively not just for acquisitions, but as a strategic tool to complete and stabilise a development, ensuring a smooth transition to long-term funding.