Special Purpose Vehicle (SPV) companies can access short term bridging loans, and they’re becoming an increasingly popular choice for property investors.
Getting quick finance through your company structure might seem complex, but it’s often simpler than you’d expect.
With property prices fluctuating and opportunities appearing quickly in today’s market, more investors are turning to SPV structures to manage their portfolios.
Whether you’re looking at auction properties, planning renovations, or expanding your commercial holdings, understanding how bridging finance works with SPVs will help you move faster when opportunities arise.
SPV Companies: Your Property Investment Vehicle Explained
Your SPV limited company keeps everything separate and straightforward.
When you set up your SPV (Special Purpose Vehicle), you’re creating a limited company with one clear purpose: handling property investments.
You’ll choose specific SIC codes when registering your company.
These identify what the company will do; its activities.
The main ones you’ll need are 68100 for buying and selling property, 68209 for letting property, or 68320 for property management. These codes matter because they show lenders your company focuses purely on property investment.
Unlike trading companies that might sell products or offer services, your SPV does one thing and does it well.
This single focus makes lenders more comfortable – they can see exactly where money comes in and goes out, making their job easier when assessing loans.
How SPV Bridging Loans Work
Bridging loans are designed to help when you need money quickly, usually for just a few months up to a couple of years.
Think of them as a financial bridge that gets you from where you are to where you need to be.
Your company might use a bridging loan in several ways.
Perhaps you’ve spotted a bargain at auction and need to complete within 28 days. Or maybe you’ve found a property that needs work before a traditional lender will touch it.
These loans fill those gaps, giving your SPV the cash it needs to move quickly.
The beauty of using an SPV for bridging finance lies in its simplicity. The loan sits within your company structure, making everything easier to track and manage.
Your lender will look at two main things: the property’s value and your exit strategy – in other words, how you’ll pay back the loan when it’s due.
Are You Eligible for an SPV Bridging Loan?
You don’t need years of property experience to get a bridging loan through your limited company.
Even investors using company structures for the first-time can access these loans if they meet the basic requirements.
Your company needs to be properly registered with Companies House and have the right SIC codes. You’ll need a UK bank account in your company’s name, and at least one director should understand property investment basics.
Most lenders want to see that you’ve thought through your investment strategy and have a clear plan for paying back the loan.
The range of properties you can finance is broader than many people realise. Residential buy-to-lets, commercial units, mixed-use buildings, and even land all qualify.
Some lenders specialise in particular property types, while others take a more flexible approach.
Let’s talk bridging loans!
Getting Your SPV Bridging Loan: Step-by-Step
Securing bridging finance through your SPV is more straightforward than many investors realise. The key lies in preparation and understanding what lenders need to see from your company.
Start with your company documentation.
You’ll need your:
- certificate of incorporation
- memorandum of association
- and recent bank statements
Lenders will look at your registered office address and want details about directors and major shareholders – anyone owning more than 25% of the business needs to be declared.
For the property itself, gather your purchase agreement or auction paperwork.
If you’re buying a tenanted property, collect information about rental income and lease terms. A professional valuation comes next – most lenders have specific surveyors they work with, so wait until they advise you on this step.
Your exit strategy is really important.
Whether you’re planning to refinance onto a commercial mortgage or sell the property, you’ll need evidence to back up your plans. This might include an agreement in principle from another lender or local market research showing similar property sales.
The Pros and Potential Pitfalls
Using an SPV for bridging finance brings clear advantages for property investors.
You’ll create a clean line between your property investments and personal finances, making everything from accounting to tax planning more efficient.
Many investors find they can borrow more through their SPV than they could personally.
Lenders often view company applications more favourably, especially when the company exists solely for property investment. Plus, keeping the loan within your company structure can make your tax position clearer.
Most lenders will ask directors to provide personal guarantees – this means you’re still on the hook if things go wrong. You’ll also need to factor in company running costs, including accountancy fees and annual filings with Companies House.
Your exit strategy needs careful planning too. Whether you’re aiming to refinance or sell, make sure your timeframes are realistic. Property markets can change quickly, and you’ll want some flexibility built into your plans.
Why Working With a Broker Makes Sense
Finding the right bridging loan becomes much easier with expert help.
A broker who knows the market can save you time, money, and potential headaches by guiding you to the right lender first time.
Think of a broker as your property finance translator. They speak both your language and the lenders’, helping to present your case in the best possible light.
They know which lenders prefer SPV applications and, more importantly, which ones offer terms that match your needs.
Good brokers do more than just find loans – they help structure your application to highlight its strengths.
They’ll spot potential issues before they become problems and suggest ways to address them. This expertise often proves invaluable when planning your exit strategy.
Ready to Move Forward? Here’s What to Do
If you’re considering a bridging loan for your SPV, start by reviewing your company setup. Double-check your SIC codes and make sure your company documentation is current.
Open a business bank account if you haven’t already – this is essential for any lender.
Think carefully about your exit strategy and gather evidence to support it. If you’re planning to refinance, talk to potential lenders now about their requirements. For a sale exit, research local market conditions and gather data about similar property sales.
Speaking with both a broker and an accountant early in the process can save you time and money. Your broker can explain your borrowing options, while your accountant can advise on the most tax-efficient approach for your situation.
FAQ
Most bridging loans complete within 2-4 weeks. Some lenders can move faster for urgent cases.
Read more: How Quickly Can You Get a Bridging Loan?
Lenders will work with newly formed SPVs. The focus is more on the property’s value and your exit strategy than company history.
Yes, most lenders require personal guarantees from all directors who own more than 25% of the company.
Bridging lenders are very flexible, so there’s every possibility that this will be OK. As with all bridging loans; it depends on the property and the exit strategy.
Most lenders require at least 20-25% deposit, though this can vary based on the property type and exit strategy. Commercial properties often need 30-35%.
Yes, SPVs can secure bridging loans for commercial, residential, and mixed-use properties. Terms may vary based on property type and intended use.
