A £200,000 commercial bridging loan has been arranged for the conversion of a Grade II listed former school in Leicester into six detached office units, after a high street bank refinance application failed to progress.
SDKA, a bridging finance provider, structured the loan through a Small Self-Administered Scheme (SSAS) pension fund to support the final stages of the development. The historic buildings had been derelict for two decades before conversion work commenced.
Bank valuation issues
The developer had already committed personal capital to the project but required additional funds to complete the scheme. A refinance application with a major high street bank had stalled because the lender would only value three completed units, as certain planning permissions remained outstanding on the remaining properties.
SDKA agreed to lend against the entire site, with the fourth unit nearing completion at the time of the loan. The transaction required trustee consent and legal due diligence to release funds directly into the SSAS structure. Andrew Carmichael of Ratio Law provided legal oversight.
Transaction timeline and terms
The bridging loan was completed in 15 working days, priced at 1.1% per month over an eight-month term. The developer plans to exit through refinancing once the development is complete.
Kunal Mehta, managing director of SDKA, said: “Despite the complexities associated with a Grade II listed redevelopment, the pension fund borrowing structure and commercial asset class, our team moved swiftly from application to completion to ensure no delays in the redevelopment process.”
The case highlights ongoing challenges developers face when securing finance for part-completed schemes, particularly those involving listed buildings. While regional property markets have shown varied performance in recent years, commercial conversions of historic buildings continue to attract development interest despite financing complexities.
Bridging finance has become an increasingly common solution for developers facing delays with traditional lenders, though broader property market conditions continue to influence refinancing prospects.
