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

The Transaction

Cohort Capital 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 transaction was secured against a cross-collateralised portfolio comprising the development site, two additional London residential apartments, and a substantial residential estate in Scotland (90 acres with fishing rights, a principal house and secondary lodge). The facility was structured at a conservative 56% loan-to-value to provide significant equity cushion and downside protection.

The Borrower

The borrower is a London residential investor, and he has owned the property since 2010, having sold the lower units on long leases while retaining the freehold. Following planning permission for a roof extension, he progressed a scheme to construct five luxury new-build apartments above the existing structure, comprising one to three-bedroom units ranging from approximately 600 to 1,485 sq ft. The sponsor had previously taken development finance from another lender; however, the project faced disruption due to contractor insolvency and disputes with professional advisers. Despite construction being near completion, the project’s distressed position meant the existing lender’s facility was maturing before completion, creating a funding gap. While the sponsor has extensive experience in London residential investments and a long track record in acquisitions, asset management, and development, contractor insolvencies remain a challenge in today’s market, reflecting the unpredictable risks property developers can face.

The Solution

Cohort Capital’s facility enabled the sponsor to repay the existing lender, create the breathing space required to appoint and settle with a new contractor, and allocate £700,000 to complete the remaining works to practical completion. The facility was structured pragmatically with staged drawdowns that are to be monitored by a quantity surveyor and supported by cross-collateralised charges, providing oversight while ensuring efficient and timely completion of the final construction phase. From underwriting to completion, the transaction completed within two weeks, providing the speed and certainty required against the deadline. Upon practical completion, the borrower will refinance the completed portfolio onto long-term Buy-to-Let facilities.
“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 a history of disruption following contractor insolvency. What made this 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 temporary disruption and reach the finish line.” Karam Salh — Senior Analyst, Cohort Capital
 
This transaction demonstrates Cohort Capital’s ability to deliver bespoke, structured bridging finance in complex real estate situations, providing certainty, flexibility, and speed of execution when it matters most.
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