When it comes to securing funding for a commercial property purchase or renovation, a bridging loan can be an attractive option for borrowers. But who are the parties involved in a typical bridging loan transaction in the UK, and what roles do they play? Let's take a closer look.
Borrower: The borrower is the individual or business seeking to secure a bridging loan for a commercial property. They will need to provide evidence of the property's value, their financial situation, and the purpose of the loan to the lender.
Lender: The lender is the financial institution offering the bridging loan to the borrower. They will assess the borrower's application, perform due diligence on the property, and set the terms and conditions of the loan.
Broker: The broker is an intermediary between the borrower and the lender, who helps the borrower find the most suitable loan product and negotiate the best terms and conditions. They may also handle the application process and offer ongoing support throughout the loan term.
Valuer: The valuer is a professional responsible for assessing the value of the commercial property that is being used as collateral for the loan. Their assessment will inform the lender's decision on the loan amount and interest rate offered.
Solicitor: The solicitor is a legal professional responsible for conducting conveyancing, the transfer of ownership of a property. They will carry out searches and checks to ensure the property is free of any encumbrances and legal issues, and will complete the necessary paperwork to secure the loan.
Appraiser: The appraiser is a professional who provides an independent assessment of the commercial property's value. Their assessment will be used to support the valuer's report, and may also be used by the lender to determine the loan-to-value ratio.
Surveyor: The surveyor is a professional responsible for inspecting the property and providing a report on its condition. This report will help the lender assess the risk associated with the loan and determine if any repairs or renovations are necessary before the loan can be approved.
By understanding the key players in a UK commercial property bridging loan transaction, borrowers can be better prepared to navigate the process and secure the funding they need. Whether working with a broker, lender, or solicitor, having a clear understanding of the roles and responsibilities of each party will help ensure a successful outcome.
Enquiries
For further information, please contact sr@bridgingfunding.com.
About the author
Sabbir Rahman is Managing Director of Langdon Capital and a Partner at Bridging Funding. He has held prior roles with Morgan Stanley, Lazard and Barclays Investment Bank. He has executed over £60 billion in notional value of transactions across financing, M&A and derivatives with global corporates, private equity funds and financial sponsor groups.
About Langdon Capital
Langdon Capital provides in-house transaction services to C-suites and Boards of publicly-listed and PE-backed businesses during the negotiation, execution and due diligence of corporate finance and capital markets transactions and senior interim resourcing solutions across finance, treasury, strategy and corporate development | contact info@langdoncap.com | visit www.langdoncap.com
This is not financial advice or any offer, invitation or inducement to sell or provide financial products or services or to engage in any form of investment activity.
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