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Case Studies
 Our customer was looking for funding for a project
consisting of an existing 3 bedroom house with 5 acres of land and
stabling that has been extensively damaged by fire. The customer
purchased the property for £435,000, with completion due 6
months from exchange of contracts. During the 6 month period our
customer was allowed to carry out works on the property. Planning permission was obtained to extensively extend and alter the property to provide 5 bedrooms, 3 bathrooms, 3 living rooms and detached garage with extensive landscaping. The building works were undertaken on an agreed fixed price basis and were due to be completed by the end of the 6 month period. Funding of £450,000 was required to enable the completion of the property purchase with additional capital to assist with costs. Mortgages for Business:
 This client was introduced by a boutique corporate
finance house, who had been seeking a mix of debt/equity on behalf
of a strong, experienced management team who wished to develop a
new, exclusive health spa. Planning approval existed for buildings
that would comprise 100 bedrooms, 58 treatment rooms and space for
other related spa activities. The total development costs for the
project, including site purchase, were close to £20m. The development site had already been purchased, with a mix of shareholders' equity and bank debt. The incumbent bank had agreed to provide further debt finance of circa £10.3m to complete the project, but the investors considered the proposal was rendered unviable by the level of equity called for in this structure. The challenge for Mortgages for Business was to maximise the debt level; £14m was considered to be the target figure. Mortgages for Business: Three key issues had to be addressed: - The business was effectively a start up, with no established track record. - The sector was unattractive to most lenders. - Debt levels sought were high in relation to overall cost and equity contribution. The approach was simply to focus a very small group of lenders who we knew to have an appetite for this type of funding. Emphasis was placed on the strength of the management team and the very positive sector dynamics of the niche area in which they had chosen to operate. One of our lenders quickly indicated broad support for the proposal, but it took a number of meetings to establish a firm basis for funding that was acceptable to all parties. A positive valuation and viability report by leading industry experts finally secured a deal offering a funding commitment of £14 million. The project is now ready to move forward.
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ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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