Somo completes £360,500 bridging loan using third-party security
When a property investment company needed capital to fund its next acquisition, Somo demonstrated its flexible approach to underwriting, completing a £360,500 first charge bridging loan secured against a family member's residential property.
The Challenge
A property investment company approached Somo through broker Posfin Capital, looking to release funds for its next investment property purchase.
However, the proposed security presented an unusual set of circumstances.
Rather than using a property owned by the borrowing company or its director, the loan would be secured against the main residence of the director's mother.
The application required careful consideration of several factors:
The security was owned by a third party who was not a director or shareholder of the borrowing company.
The property was the third party's main residence.
The borrower had a Tier 3 credit profile.
The proposed exit involved selling the security property, requiring clarity around the owner's future living arrangements.
The Solution
Somo's underwriting team took a considered approach, assessing the strength of the property security alongside the company's borrowing requirements.
The security was a three-bedroom residential property in Romford, independently valued at £515,000.
Using its Valuation Only™ product, Somo structured a £360,500 first charge facility at 70% LTV over a 12-month term.
Given the involvement of a third-party property owner, additional safeguards were put in place, including independent legal advice and confirmation that they understood the nature of the transaction fully.
The team also established a clear proposed exit strategy. The property would be marketed for sale approximately six months before the end of the loan term, with alternative accommodation arrangements considered for the owner.
With the necessary checks and legal requirements satisfied, Somo was able to proceed with the facility.
The Outcome
Somo successfully completed the £360,500 bridging loan, providing the company with capital to support its next property investment.
The facility completed within 37 days of the initial application, demonstrating Somo's ability to assess and progress more complex security arrangements.
The case highlights Somo's willingness to consider circumstances that may fall outside the criteria of more conventional lenders, while maintaining appropriate underwriting and legal safeguards.
Joe Cash, Senior Underwriter, Somo
"Not every bridging application fits a conventional structure, and this was a great example of why flexibility matters. The security was owned by the company director's mother, so it was essential that she fully understood the arrangement and received independent legal advice. With the right safeguards in place and a clearly considered exit strategy, we were able to deliver the funding the business needed. It's about finding solutions without compromising on responsible underwriting."
If your client is a company director, we'll secure the loan over their main residence, even if it's not in their name.
