Directors of pub chain with poor trading accounts secure £150k for refurb

We were approached by the directors of a small pub chain in Wales, who had recently purchased another pub and wished to raise finance to refurbish the property.

As security, the clients were offering a first charge on another of their pubs, which had been refurbished already and had traded successfully for two years, now boasting an annual turnover of over £750,000. However, the costs incurred in the works had damaged the strength of the company accounts and reduced the operating profit by approximately £120,000 across the two years.

We felt that the clients’ existing bank was best placed to deliver the requested funds based on their rates and existing relationship with our clients.

We worked with the directors to provide an adjusted set of accounts that reflected the one-off nature of the recent refurbishment costs and, by offering director’s guarantees and a debenture over the company as additional security, were able to put together a strong proposal.

We then accompanied our clients to the lender assessment interview to help with the negotiations. 

Property Details

Satisfied with the security offered and the small loan to value, the bank offered the following, favourable terms:

Property value: £450,000

Loan amount: £150,000

LTV: 33%

Rate: Bank Rate + 3.25%

Term: 15 years, capital and interest

Borrower: Trading limited company

Mortgage payment:  £ 1,097 pcm

Lender arrangement fee: 1.5% (£2,250)

Consultant: Andy Elley, 01732 471644

14th February 2017