Cohort Capital delivers £3.8m rescue bridging loan for London development

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Cohort Capital Delivers £3.8m Rescue Bridge Loan After Contractor Insolvency Threatens Completion

Cohort Capital has provided a £3.8 million bridging loan to refinance a maturing development facility and fund the final stages of a residential scheme in London.

The facility was secured against a cross-collateralised portfolio comprising the development site, two additional London residential apartments, and a 90-acre residential estate in Scotland, including fishing rights, a principal house and a secondary lodge.

The loan was structured at 56% loan-to-value, providing a strong equity cushion and downside protection.

The borrower, a London-based residential investor, has owned the property since 2010. Having sold the lower units on long leases while retaining the freehold, the sponsor secured planning permission for a roof extension to deliver five new-build apartments above the existing structure.

The scheme comprises one to three-bedroom units ranging from approximately 600 to 1,485 sq ft.

The project was originally funded through a development facility with another lender but encountered disruption following contractor insolvency and disputes with professional advisers. Although construction was close to completion, the existing facility was approaching maturity, creating a funding gap.

Cohort Capital’s facility enabled the borrower to repay the outgoing lender, appoint a new contractor and allocate £700,000 to complete the remaining works to practical completion.

The loan was structured with staged drawdowns, monitored by a quantity surveyor, alongside cross-collateralised security to provide oversight while maintaining delivery speed.

The transaction completed within two weeks, providing the certainty required to meet the deadline.

Upon practical completion, the borrower intends to refinance the completed portfolio onto long-term buy-to-let facilities.

Karam Salh, Senior Analyst at Cohort Capital, said:

“This transaction exemplifies the type of bridging solution we specialise in at Cohort Capital: time-sensitive situations that require both sophisticated structuring and rapid execution.

The sponsor approached us with a redeeming facility, a partially completed development and disruption following contractor insolvency.

What made the deal particularly compelling was his experience in the London residential market and a proven track record of successful exits.

While this experience provided confidence in delivery, it could not fully eliminate the risks associated with prior contractor failure. Accordingly, we structured the facility with cross-collateralised security to strengthen downside protection.

Ultimately, this deal reflects our core philosophy: backing experienced sponsors with strong fundamentals through flexible, pragmatic financing that helps them navigate disruption and reach completion.”

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