Refinance Rescue: A Fresh Start
Case Study: How Bridging Finance Helped a Client Overcome Bankruptcy and Secure Their Financial Future 🏡💼
At Aura Capital, we specialise in providing bespoke financial solutions, including bridging finance, to help clients navigate even the most challenging situations. 💪 This case study highlights how we assisted a client in using a bridging loan to annul a bankruptcy petition, clear existing debt, and facilitate the sale of their home—despite the property having a 30-day possession order.
The Client’s Situation 📄
Our client, a UK national, had initially taken out a short-term loan to repay a £250,000 business loan that had reached the end of its term. However, due to unforeseen financial challenges, the client faced a bankruptcy petition tied to unpaid rent from their business. This placed them in a difficult position, needing to repay their business loans, manage an existing Debt Management Plan (DMP), and address the bankruptcy petition simultaneously.
To make matters more urgent, the property had a 30-day possession order, meaning the client was at risk of losing their home if immediate action wasn’t taken.
To avoid bankruptcy and resolve the possession order, the client was granted a limited timeframe to repay £50,000 of unpaid rent, which would annul the petition and provide a path forward.
The Challenge 🚧
The client’s financial situation presented several hurdles:
Clear the Bankruptcy Petition: The client needed to repay £50,000 of unpaid rent to discharge the pending bankruptcy petition.
Settle Existing Business Finance: The £250,000 business loan needed to be repaid.
Address Unsecured Debts: The client’s Debt Management Plan (DMP) of approximately £100,000 required attention.
Resolve the 30-Day Possession Order: Repay the existing first charge to prevent the loss of their property.
The client’s primary goal was to resolve these financial obligations while protecting their credit profile and unlocking the sale of their property.
Our Solution: Bridging Finance 💡
After a thorough assessment of the client’s circumstances, we structured a bridging finance solution tailored to their needs:
Loan Amount: £550,000 (to repay the First Charge Mortgage, existing business finance, debt management plan, and discharge the pending bankruptcy).
Loan Term: 12 months.
Interest Payments: Retained (rolled up into the loan) to relieve the client of monthly interest payments and ease cash flow pressures.
The Outcome 🎉
Our bridging finance solution provided the client with the following benefits:
Bankruptcy Petition Annulled: The £50,000 debt was repaid in full, allowing the client to avoid bankruptcy and protect their credit profile. ✅
Existing Debt Cleared: The refinance settled the £250,000 business loan, simplifying the client’s financial obligations. 💳
Unsecured Debts Addressed: The client’s Debt Management Plan (DMP) was resolved, providing further financial relief. 🛠️
30-Day Possession Order Resolved: Repaying the existing mortgage cleared the possession order allowing the client to retain their property. 🏠
Property Sale Unlocked: With the bankruptcy petition resolved and the possession order lifted, the client was able to proceed with the sale of their property, which was listed on the market.
Why Bridging Finance Worked 🤔
This case demonstrates the importance of bridging finance in resolving complex financial challenges. By understanding the client’s unique circumstances, we were able to:
Provide Immediate Relief: The bankruptcy petition was annulled, and the possession order was resolved, protecting the client’s financial future and home. ⏳
Simplify Debt Structure: Consolidating multiple debts into a single bridging loan made the client’s financial obligations more manageable. 🔄
Align with Exit Strategy: The 12-month loan term aligned with the client’s plan to sell their property, ensuring a clear path to repayment. 🗓️
Key Takeaways 📌
Bridging Finance Can Resolve Complex Issues: A well-structured bridging loan can address immediate financial challenges, including bankruptcy petitions and possession orders, while paving the way for long-term stability. 🛤️
Tailored Solutions Matter: Every client’s situation is unique, and a one-size-fits-all approach rarely works. At Aura Capital, we take the time to understand your needs and craft solutions that work for you. 🎯
Timely Action Is Crucial: Acting quickly can prevent financial challenges from escalating and open up new opportunities for resolution. ⏰
How We Can Help You 🤝
If you’re facing financial difficulties, a possession order, or need a tailored bridging finance solution to unlock the value in your property, we’re here to help. Whether it’s for property purchase, auction finance, or debt consolidation, our team has the expertise to guide you through the process and achieve your goals.
📞 Contact us today to discuss how we can create a bridging finance solution tailored to your needs.
Disclaimer: This case study is based on real-life scenarios but uses anonymized details to protect client confidentiality. Results may vary depending on individual circumstances. Always seek professional financial advice before making decisions.
