Using Bridging Finance to Consolidate Business Debt and Release Capital with a Sale Exit

Client Background

Our client was a single applicant based in Middleton-in-Marsh, Gloucestershire, who owned a high-value residential property valued at approximately £1.5 million.

The property was set within approximately five acres and included equestrian facilities, forming a key asset within the client’s wider financial position.

The client was a self-employed business owner and director of a rail systems company. At the time of the application, the property had an existing mortgage balance of approximately £574,000, alongside additional business-related liabilities.

The Scenario

The client required funding to consolidate existing liabilities and support wider business obligations.

His objectives were to:

• Raise approximately £300,000
• Repay a second charge private loan of approximately £200,000 owed to a relative
• Settle an additional HMRC liability of approximately £100,000 linked to the business
• Structure the borrowing on a short-term basis
• Exit the facility through the future sale of the property, which was already being marketed through Savills

The funding requirement was designed to consolidate debt and release capital while relying on a clear sale-based exit strategy.

The Challenges

This case involved several important complexities that required specialist lender selection and careful structuring.

The transaction centred around consolidating both private and business-related liabilities, including an outstanding HMRC debt. In addition, the structure required second charge lending behind an existing mortgage.

The case also involved wider business exposure and time-sensitive repayment obligations, while the repayment strategy relied on the successful future sale of the property.

Traditional lenders were unsuitable due to the business-purpose borrowing requirement and the complexity of the overall liability structure.

The Solution

We arranged a tailored second charge bridging loan designed specifically to consolidate the existing liabilities and release additional capital efficiently.

The funding solution included:

• A net loan amount of approximately £300,000
• A 12-month term
• A loan-to-value of approximately 65%
• Rolled-up interest with no monthly repayments required
• Second charge security behind the existing mortgage
• Fees added to the loan to preserve liquidity

The lender selected was able to provide the flexibility required to support second charge bridging for complex business-related debt consolidation.

The structure enabled the client to consolidate multiple liabilities into a single manageable facility while maintaining flexibility around the planned property sale.

Implementation Process

This case required a structured and solution-focused approach throughout the transaction.

We carried out a detailed assessment of the client’s wider financial position, including both personal and business liabilities, before structuring a bridging facility aligned to the sale-based exit strategy.

A suitable lender was sourced that could accommodate the second charge structure alongside the business-purpose borrowing requirement and HMRC liability. The facility was then aligned carefully with the ongoing property sale process.

Throughout the transaction, communication between all parties was managed proactively to ensure the funding completed efficiently and within the required timeframe.

The Outcome

The bridging loan completed successfully, enabling the client to consolidate debts and resolve the outstanding liabilities.

As a result, the client was able to:

• Repay the £200,000 private loan successfully
• Clear the outstanding HMRC liability
• Consolidate multiple debts into a single structured facility
• Maintain flexibility through rolled-up interest with no monthly repayments
• Proceed with a clear and manageable exit strategy via property sale