Arc & Co. and Glenhawk have successfully secured a £1.6 million second charge bridging loan for a property developer. This significant deal centers around a highly valued single asset located in the affluent area of Wentworth.

What is a Second Charge Bridging Loan?

A bridging loan is a short-term loan used by property developers to ‘bridge’ the gap until longer-term financing can be arranged. In this case, the loan is a ‘second charge’ loan, meaning it is secondary to the first mortgage on the property.

The loan covers 51% of the Gross Development Value (GDV) of the property. This is a way of estimating the value of the property once development is complete. The loan comes with a monthly interest rate of 1.3% and is set for a term of eight months.

Increased Property Value

The property, originally valued at £19 million, saw an impressive increase in value during the loan term. Its GDV shot up to £24.5 million. This increase in value played a crucial role in Glenhawk’s decision to offer a second charge bridging loan.

Arc & Co.’s CEO, Andrew Robinson, highlighted the complexity of securing a second charge behind a bridging lender, especially for a high-value, prime single asset. Glenhawk, known for their innovative approach, worked hand-in-hand with Arc & Co., ensuring that the terms of both the first and second loans were aligned. This strategic move streamlined the client’s overall debt package.

Nick Hilton, managing director at Glenhawk, praised the nearly decade-long collaboration with Arc & Co, saying, “Collaborating with Arc & Co. for nearly a decade, on multiple finance deals, is testament to their unrivalled expertise in the prime real estate market. For this loan, we navigated a dual charge structure, optimising flexibility and precision for an evolving property project.”