MFS partners with Knight Frank Finance on bridging loan for hotel & spa refurbishment

Market Financial Solutions (MFS) has completed its first deal in collaboration with Knight Frank Finance.

Bridging lender MFS was asked to support Knight Frank Finance’s client by providing a bridging loan for the renovation of a spa hotel in North Warwickshire.

The hotel had been trading since summer 2021 and, despite setbacks due to the pandemic, it had already increased in value after works were completed on the main residency.

Upon receiving the enquiry, MFS had to work quickly to support the borrower, with many of the completed works having been privately funded.

The bespoke bridging loan was to provide breathing space so the hotel owner could pay contractors and fund the renovation of the spa.

MFS faced several complications during the case. The property is a Grade II listed building, meaning renovation works must adhere to strict regulations.

Further, MFS had to work around a complex company structure, with two clients situated outside the UK. Clear communication, working around multiple time zones and meeting the client’s tight deadlines were all of utmost importance.

MFS underwrites from day one, meaning it becomes aware of any complications from the start and can address them head on.

For instance, a potential problem regarding the legal structure of the lease immediately became apparent, but MFS was comfortable with the issue, particularly owing to the strength of the commercial asset and the LTV of the deal.

The low LTV rate of 50% meant MFS did not require any additional security, giving it the confidence to move ahead at pace.

The exit strategy was also simple: refinancing through a challenger bank.

Daniella Campbell, Mortgage Consultant, Knight Frank Finance said:

“MFS were able to consider all aspects of this case, where the majority of other lenders deemed it high-risk given the complex circumstances in the background.

They were able to underwrite and issue credit-backed terms within 24 hours.”

Paresh Raja, pictured, CEO of MFS, added:

“This case brings many of MFS’s strengths to the fore. Firstly, our ability to manage complicated cases – with our experience and skill, we’re able to see the bigger picture and find ways around potential issues.

Our communicative approach, keeping all stakeholders up to speed on what’s happening, also avoids any unwanted shocks and surprises.

It was great to work with the esteemed team at Knight Frank Finance on this particular deal.

We were delighted to deliver the commercial loan without any undue delays, meaning the client’s deadlines were met and renovations works on the hotel could continue unhindered.”