Commercial conversion for a BVI, E13

Published by MT Finance -

Client’s circumstances:

Client was part way through converting a large commercial property into residential flats but due to other investment opportunities within their business, they needed to release further capital to complete the works and allow them to continue with onward investments.

The client is a BVI company and didn’t want to wait around for more complex long-term finance and as they had worked with us previously and had first-hand experience of our ability to deal with complex income structures, they contacted us straight away.

MT Finance solution:

The client had a pre-let agreement in place and had completed a like-for-like project next door, which upped our comfort level as we knew they had previous experience and knowledge.

Despite the Covid-19 lockdown rules and two sets of lawyers having to be instructed (one UK based and one for the BVI aspect of the business), within just 5 weeks, we delivered the first tranche of £415,000 based on the £1.8m current open market value.

After the first lot of works were complete the value increased to £2.3m and as the LTV was so low, we then released the full amount (£681,860) to the client based on this uplift in value. Interest was retained at 0.80% over a 15-month term- there are no exit fees or early repayment charges, should the client wish to redeem our loan before the 15-month term.

The benefits:

By taking out our bridging loan, the client was able to continue with the heavy refurbishment works and free up cash flow in their business. The 15-month term will give them plenty of time to complete their development project, adding another property to their growing HNW portfolio. They will then refinance against the increase in value and the income from the let units.