Atom Bank has completed a £1.1 million commercial loan secured against a learning disabilities care facility in Hampshire, delivering the funds within five weeks to help the borrower avoid penalty fees on an expiring bridging loan.
The borrower had purchased and developed the property into a six-bed learning disabilities unit approximately one year prior. The facility is currently let to a corporate tenant on a 15-year lease. The property was initially acquired using bridging finance, which was approaching its expiry date.
Valuation challenges
According to Matt Martin, co-founder of Align Property Finance who brokered the transaction, several lenders faced difficulties committing to a valuation of the specialist care property. This presented a risk of delays and additional costs if the bridging loan deadline was missed.
Atom Bank processed the application from valuation to drawdown within the five-week timeframe by running legal work in parallel with the property valuation. The lender offered up to 75% loan-to-value, providing flexibility in case the valuation fell short of expectations.
Specialist care home lending
Neil Findlay, senior commercial BDM at Atom Bank, said: “Care homes are a complicated asset, which can put some lenders off, but we’ve built specialist knowledge of the sector, which means we are well placed to support such cases, whether they are commercial investors or first-time care home operators.”
The care home sector has seen increased interest from institutional investors in recent years, though specialist properties can present valuation challenges for traditional lenders.
Martin noted that Atom Bank adjusted some requirements to completion conditions to ensure the deadline was met. He indicated the lender would be considered for similar transactions in future.
The transaction highlights the time-sensitive nature of refinancing specialist commercial property, particularly when bridging finance arrangements approach their expiry dates. While property market conditions continue to evolve, specialist care facilities remain a distinct segment within the commercial lending market.
