A specialist lender has completed a £2.275 million residential bridging loan to support the acquisition of a former AA building in Newcastle upon Tyne.

SDKA provided the funding after a developer’s plans to buy and convert the property into 116 flats were at risk of collapsing when another lender stalled the application.

Broker Chris Ferguson of Ferguson Capital approached SDKA to rescue the transaction. The initial loan was agreed at 87.5% loan to value against the purchase price, with the valuation later confirming a final LTV of 53.66%.

During the process, SDKA’s in-house legal team worked through a number of complex issues linked to the structure of the deal and the asset itself. From first contact to completion, the loan took seven weeks to conclude.

The £2.275 million facility was completed at a fixed rate of 1.05% per month, with 12 months’ interest retained upfront. The agreed exit strategy is a refinance onto a development finance facility once pre-commencement conditions have been met.

Ferguson said: “This deal was misfiring and it was going to take a pragmatic and flexible lender that could get hands-on quickly. That’s why I contacted SDKA, I knew their flexible lending criteria, individual case approach and service levels would be the best option to restart this acquisition.

“With time pressure mounting, it was crucial to have a lender that could make decisions quickly and work through the issues without losing momentum.”

Kunal Mehta, managing director of SDKA, said: “When we were first approached the size and complexity of the deal was clear from the outset, and this is where we shine.

“It is imperative to look beyond the basic numbers and understand the applicants’ vision, and we enjoy sharing that journey.”