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The Role of Commercial Property Bridging Loans in UK Property Purchases by Foreign Nationals

Updated: May 2, 2023

Purchasing property in the United Kingdom can be a complex and daunting process, particularly for foreign nationals. One potential solution for financing such a purchase is a commercial property bridging loan. These short-term loans are designed to bridge the gap between the purchase of a property and the securing of long-term financing or the sale of another asset to release liquidity.


For foreign nationals, bridging loans can be an attractive option as they do not typically require a credit check or income verification, and can be approved and funded quickly. However, it is important to note that the economic terms of these loans are often less favourable than traditional mortgages, with higher interest rates and fees. Additionally, the property being purchased must be used for commercial purposes, such as for business use (i.e. office or retail space) or investment (i.e. buy-to-let residential property).


When applying for a commercial property bridging loan, foreign nationals will typically need to provide proof of funds for the deposit to their solicitor, as well as a valid passport or ID. It is also important to note that these types of loans are typically only available for properties located in the United Kingdom.


It is also important to note that the terms of bridging loans are typically less favourable than traditional mortgages, with higher interest rates and fees. Additionally, a condition of the loan is often that the property being purchased must be used for commercial purposes, such as for business use or investment purposes.


Despite the potential drawbacks, a commercial property bridging loan can be a valuable tool for foreign nationals seeking to purchase property in the United Kingdom. However, it is important to carefully consider the terms and conditions of the loan, and to seek the advice of a financial professional before making any decisions.


In conclusion, foreign nationals looking to purchase commercial property in the UK, bridging loans can be an attractive option to consider. However, it is important to weigh the pros and cons of these loans and to seek professional advice, including that of an experienced property lawyer, before making a decision.


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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