The opportunity
A trading asset with an existing bridge to replace
HBI Capital provided funding to refinance an existing bridging facility secured against a hotel property with adjoining residential accommodation. The borrower is an experienced property investor with a track record across a range of asset types.
The hotel benefits from strong occupancy, operating as accommodation for contractors working on major regional infrastructure projects, a steady, contract-driven income stream rather than seasonal leisure trade. With the incumbent bridge approaching the end of its term, the borrower needed a lender comfortable with a trading hospitality asset and able to move quickly.
Hospitality assets need a lender who will look at the trading, not just the bricks. Here, both stacked up.
The structure
First legal charge, specialist valuation and a term-debt exit
The facility was secured by a first legal charge over the property, supported by a personal guarantee from the borrower. As part of HBI’s underwriting, the security was subject to an independent specialist valuation, reflecting the trading nature of the asset and the residential element alongside it.
The proposed exit was a refinance onto a commercial mortgage facility following completion of the bridge. A term of up to 12 months gave the borrower ample time to evidence the trading history a commercial lender would want to see, and to complete that refinance without pressure.
Why it worked
Three things that made this a straightforward yes
- 01
Strong, contract-backed occupancy
Demand driven by contractors on long-running infrastructure projects gave the hotel dependable income through the term.
- 02
An experienced investor
A borrower with a proven record across property types, backing the facility with a personal guarantee.
- 03
A conventional exit at a sensible LTV
At 70% LTV against a £1.1m specialist valuation, a refinance onto a commercial mortgage is a well-trodden route for a trading hotel.
