Why investors use SPVs
An SPV is a limited company set up to hold property and little else. Investors and developers use them to keep each project separate, to manage tax, and because buy-to-let and development lenders are familiar with the structure. Lenders like SPVs because the company has no unrelated trading history or liabilities that could affect the property.
Tax treatment of company ownership differs from personal ownership, including stamp duty, corporation tax and how profits are extracted. Take tax advice before choosing a structure, as lenders will not advise on it.
How lenders assess a company
A company borrower is assessed on the property and exit, like any bridge, but the lender also looks at who owns and runs the company. Expect checks on:
- Directors and shareholders, usually anyone with 20% to 25% or more
- The company's registration and filings at Companies House
- The experience of the people behind it
- Personal credit and assets and liabilities of the key individuals
- For trading companies, recent accounts and any existing debt
Newly formed SPVs are normal and widely accepted. The lender looks to the people behind it rather than the company's own track record.
Personal guarantees
Most bridging and development lenders ask directors or major shareholders to give a personal guarantee. If the company cannot repay, the lender can then pursue the guarantor personally. Guarantees can be limited to a set amount or unlimited, and where several people give them they are often joint and several. Many lenders require guarantors to take independent legal advice.
Our guide to personal guarantees explains what you are signing and the points to check.
Regulation and company borrowers
A loan to a limited company is not a regulated mortgage contract, even if a director's family lives in the property. But lenders will still ask how the property is used, and some will not lend to a company against a property that a director or their family occupies. Describe the use accurately from the start.
If you are borrowing personally and the property is, or will be, lived in by you or a close family member, the loan is a regulated mortgage contract and comes with additional protections; we will tell you at the outset how your case will be handled. See regulated and non-regulated bridging.
Other structures
Lenders also consider limited liability partnerships, trusts and, more selectively, overseas companies. Each brings extra checks on ownership, control and who can sign. Layered structures, such as a company owned by another company or a trust, take longer to verify, so share a structure chart early.
For company and SPV cases, compare lenders on Instant Quotes, then have your company documents ready, as listed in our documents checklist.
Documents for company borrowers
- Certificate of incorporation and the company's registered details
- A structure chart showing every shareholder down to the individuals who own or control it
- Identity and address documents for each director and significant shareholder
- Personal assets and liabilities statements for the key individuals
- Filed accounts and management accounts where the company trades
- A board resolution approving the borrowing, usually prepared by your solicitor
Where a company is owned by another company or a trust, lenders need the same information for each layer. Having this ready at the start avoids the most common source of delay on company cases. See the full documents checklist.
Common questions
Can a new SPV with no accounts get a bridging loan?
Yes. Newly formed SPVs are common, and lenders assess the directors, shareholders and the deal rather than the company's own history.
Do I have to give a personal guarantee?
Most lenders ask directors or major shareholders for one on company borrowing. Terms vary, so read them carefully and take legal advice.
Is a bridging loan to a company regulated?
No. A loan to a limited company is not a regulated mortgage contract, though lenders still ask how the property is used.
This guide is for general information only and should not be treated as legal, tax or financial advice. Lender requirements depend on the property and your circumstances.
