The client is a very experienced commercial property owner, investor and developer who trades through a long-established limited company.
He approached me for help in refinancing a two-storey shop in the popular shopping area of the Brighton Lanes. The shop has recently been let on a long lease to an established, specialist chain store and generates a healthy rent of £35,000 pa.
In addition to remortgaging the shop, the client wanted to raise capital to repay a director's loan which had been used to refurbish the property prior to the tenant moving in.
The client's existing lender could only offer capital and interest terms and faced challenges getting the deal approved from their credit committee. To ease cash flow and make tax savings, the client said he would prefer interest-only terms if possible.
I approached a reputable building society which agreed to lend on interest only terms at a rate lower than the challenger banks, thus saving my client around £3,750 pa. Also the building society agreed to lend without making the client move his business banking over to them - something that most high street banks insist upon.
Here are the details of the deal:
Property value: £550,000
Loan amount: £250,000
Loan to value: 45%
Rate: Bank Rate 0.5% + 3.99%
Term: 13 years interest only
Mortgage payment: £935 pcm
Rental income: £35,000 pa
Gross yield: 6.4% pa
Lender arrangement fee: 1.5%
Completion date: January 2015
This is just one example of how I've helped a client secure a commercial mortgage. To see more of my case studies please visit my profile page. And if you have any funding requirements, please do not hesitate to contact me. My direct line and email address can be found below.