Mr Shepherd approached us as he needed a commercial mortgage to purchase a warehouse he was renting. The freeholder was looking to retire and gave our client first option to buy. However, the deal required confirmation of funding and needed to complete within six weeks.
Given the brief, we completed a case summary the same day. We then obtained an agreement in principle from a lender within 24 hours. The terms were for a 70% advance of £400K tracking at 3.75% over bank base rate with a 1.5% lenders fee. Three days later we obtained a commercial valuation, and a satisfactory report delivered within the week.
Solicitors were appointed, and all searches and due diligence completed by week four. By week five funds were drawn down, and the purchase completed ahead of schedule.
Buy to Let Portfolio Re-Finance
Mr and Mrs Gray had a portfolio of forty eight residential investment properties in London. The mortgages on the properties were through eleven different mortgage providers, and the portfolio geared up to an average 58 % LTV. The average yield across the portfolio stood at 7%.
The clients wanted to leverage equity from the portfolio. Using the cash released they could then carry out significant upgrades to fifteen of the units in their portfolio. They also wanted a pre-purchase facility enabling them to acquire further units at substantial discounts. As this project required a considerable amount of research, our investment mortgage partner took the case over. He conducted an audit of all mortgage redemptions on the existing finance arrangements along with an updated valuation report.
After presenting the business plan to three institutions, we negotiated a progressive re-finance at 3.5% over bank base rate. An additional enhancement to the deal was a rolling £950K ‘cheque book’ facility which allowed the clients to take advantage of future purchase opportunities. The deal added £67,000 annually to the bottom line of the clients business.
Our clients Mr and Mrs Williams wanted to purchase a thirty two bed hotel in Dorset. The couple were embarking on a new career along with Mrs Williams parents who had strong hotel sector experience. The clients had two London properties to sell to support the hotel purchase. The family home sold quickly, but an investment flat on a buy-to-let mortgage proved harder to sell. Given the brief, we immediately produced a robust business plan for the new venture. The business plan was backed up with three years trading accounts for the hotel.
Negotiations with four lenders produced a 70% advance of £1.4 million for the hotel purchase at 3.25% above bank base rate. A temporary bridging loan secured against the London flat ensured that the deal completed on time. The mortgage concluded successfully, and the bridging facility redeemed two months later when the remaining flat was sold.
Purchase of a Trading Engineering Business
Mr Stevens ran a successful foundry company for 11 years. He had the opportunity to acquire a castings engineering business as the current owner was in financial difficulties. The business also complimented Mr Stevens existing operation. There were also significant expansion opportunities as well as cost savings in managing the combined operations.
As well as the freehold property the sale also included significant fixed assets, machinery, raw materials and £150k of debtor invoices. Working quickly to obtain an ‘agreement in principle’ we organised valuation of the property, a full inventory and sales ledger audit. The audit concluded within three weeks. Solicitors were appointed, and the client received a combined business loan facility of over of £1 million. The loan included the commercial mortgage over a 30 year term. It also included asset finance over five years and an 80% non-recourse factoring facility to cover the sales ledger and release the existing debt. Mr Stevens successfully concluded the purchase within two months of the first call he made to our team.
Development Loan, 13 Apartments
Our client Mr Robinson had been running a successful York-based building company for ten years. Previously he obtained financial support from an equity-based investor who provided funds in return for an agreed profit share. When this funding ended, the client approached us to help find £1.4 million for his next project.
An initial consultation placed the project with two merchant banks. Two weeks later the underwriter meetings were complete, and an updated project summary report plus GDV valuation obtained from Knight Frank.
Both underwriters issued ‘heads of terms’, and our client accepted the offer. The loan included a 50% advance towards the site purchase and 100% of build costs, drawn in agreed stages, against interim inspection reports. Client charges were 2% set up fees, 2% exit fee on the facility and an interest rate of 7% over three month LIBOR.
There is an ever-growing range of specialist commercial finance products available to borrowers. The challenge is to find the product that best suits your particular needs and circumstances. That is precisely where the services of a specialist broker such as Fusion Finance can make all the difference. Firstly, we bring expertise along with access to the wider lender market including private banks and funds. Secondly, we aim to find you the best funding for your particular circumstances. Finally, our help and advice are impartial, in confidence and given without obligation.
As Covid-19 sweeps through the globe, the real estate debt market (as many other components of the economy) is experiencing a sharp slowdown and showing signs of potential weakness, a new research has found.