In the ever-evolving landscape of property investment, seizing opportunities often requires swift and strategic financial moves. Bridging finance has emerged as a powerful tool that property investors and developers can leverage to secure promising ventures. To illustrate the real-world impact of bridging finance, let’s delve into a compelling case study where AFIG played a pivotal role in helping a client turn vision into reality.
The Case of Vision Tower: A Bridging Finance Success Story
Vision Tower: This ambitious project proposed to deliver over 300 residential units to Manchester City Centre, with a staggering Gross Development Value (GDV) exceeding £125 million. However, this prime city centre development site came with its unique set of challenges and opportunities.
The Challenge: Being one of the very last remaining city centre development sites, time was of the essence. The client had to move swiftly to secure the purchase, which included not only the land with planning permission but also equity and VAT loans. Adding complexity to the situation was the fact that the client had previously taken an option on the property six months earlier and had significantly enhanced its planning and, consequently, its value—from approximately £8 million to £12 million.
The Solution: AFIG, with its expertise in bridging finance, stepped in to secure a tailored financial package that aligned with the client’s objectives. Here’s what AFIG accomplished:
- Bridging Loan: AFIG secured a bridging loan at 85% of the purchase price, leveraging 60% of the new valuation. This loan provided the client with the necessary capital to move quickly and secure the property.
- Equity Loan: Recognising the added value brought to the project through enhanced planning, AFIG arranged an equity loan equivalent to 10% of the new valuation. This injection of capital further fortified the client’s financial position.
- VAT Loan: To address the VAT requirements associated with the purchase, AFIG facilitated a fully funded VAT loan amounting to 20% of the purchase price.
Crucially, AFIG collaborated with three separate lenders to piece together this multifaceted financial solution, showcasing their ability to navigate complex financing structures.
The Outcome: After numerous negotiations, consultations, and a determined effort, AFIG successfully completed the acquisition within the designated timeframe. This achievement allowed the client to proceed with their intended plans for the site, turning their vision into a tangible reality.
Could Bridging Finance Benefit Your Project?
The case of Vision Tower serves as a testament to the power of bridging finance and loans in the realm of property investment. It highlights the vital role that strategic financing plays in enabling investors and developers to seize unique opportunities and overcome challenges. Whether it’s unlocking the potential of a prime city centre development or embarking on a renovation venture, bridging finance offers the agility and resources needed to make the most of every investment.
At AFIG, we specialise in constructing specialist debt for property professionals. With a track record of successfully deploying over a billion pounds of property debt and facilitating the creation of thousands of homes across the UK, our commitment to service and tailored financial solutions has earned us recognition from both customers and industry peers.
If you’re ready to explore how bridging finance can work for you, reach out to us today and embark on your journey towards property investment success.