Bridge Financing Companies: Changing the Borrower to a Newco SPV

You approached us in your own name. The term sheet is on the table. Then the tax advice arrives: complete through a newly incorporated SPV that has no accounts, no filing history and no credit file.

That switch is ordinary in UK purchases. It is not ordinary for every lender. Where the money comes from a bank line or a warehouse facility, the borrower is often fixed at credit committee. Re-papering the facility onto a newco is, for those lenders, a new deal.

The live question is whether the same short-term facility can survive a change of borrower before completion.

Why the buying entity changes after the term sheet

Solicitors rarely lock the vehicle on day one. An individual buyer may need an SPV to ring-fence the asset, to satisfy a trustee, or because Stamp Duty Land Tax and ATED advice only settles after heads of terms. None of that is exotic. The friction is timing.

The original paper was often a residential bridging loan written against you personally. The newco has none of that history. Lenders that underwrite income and company accounts hit a wall.

Lenders that underwrite the asset and a dated exit can keep moving, provided KYC on the new directors and shareholders is clean. This is not tax advice; structure the vehicle with your own counsel. Our job is to say whether the facility can follow it.

Offshore shareholders add a second identity loop. The extra time looks like the work we describe when lending through an offshore company, even if the newco is a UK company.

Why some lenders cannot change the borrower

Credit lines, warehouse covenants and committee mandates tend to fix the borrower at approval. Change the name and the file goes back in as a fresh application. That matters inside a chain break, a 28-day auction completion, or an exchange that will not slip.

A new Decision in Principle in the newco's name is not the whole answer if the legal work, valuation reliance and charge documents all have to start again.

As a direct private lender we can re-paper the facility onto the newco. If the asset, the LTV and the exit still stand, we re-run KYC and issue a revised, indicative term sheet against the newco.

If that is your position, raise it with the desk before the original paper goes stale. The first filter, if you are placing an SPV or trust, is whether the lender can change the borrower at all.

That is why an SPV, trust or offshore buyer should choose a UK bridging lender on that point, not on rate alone.

How a direct private lender moves the facility onto the newco

The work is mechanical, not a new credit story. New company, new directors, new shareholders, source of funds. Then personal or corporate guarantees, a debenture over the SPV, and a first charge on the property.

The SPV is the borrower. The people who own it still stand behind the paper. That distinction is what lets us fund a company with no accounts without pretending it has a credit file.

A charge must be registered at Companies House within 21 days beginning with the day after the date of creation of the charge. Miss that window and the security is at risk against a liquidator or another creditor. We will not treat the filing as an afterthought.

The valuation on the original paper can usually stand. Identity and security cannot. Drawdown is typically about two weeks from a clean file, with an indicative term sheet in 24 hours on the revised borrower.

Facilities are sized at £1M to £100M and up to 75% LTV, subject to valuation and due diligence. If the asset is commercial or prime central London rather than a straightforward house, use the UK bridging loan products rather than forcing a residential box.

When changing the borrower is the wrong call

A bridge is the right tool when the property supports the LTV, the exit is dated, and the newco is a genuine completion vehicle. It is the wrong tool when you need a five-year term loan, or when directors cannot pass KYC. It is also the wrong tool when the exit is a hope rather than a sale, a refinance or a development exit.

The main risk is the calendar. Re-running KYC on new shareholders takes days, not hours. If completion is tomorrow and the SPV was formed this morning, you may be too late.

We have funded prime London stock against a dated exit on a fixed timetable, including strategic bridge funding for a prime Hampstead property. Tell us the entity will change before you need the money, not after.

Whether a lender can change the name on the facility is worth settling early, however competitive the original rate looked.