Commercial mortgage & business loan for group of companies
We were approached by a broker whose clients, the directors of a group of waste management companies, were looking to raise capital against one of their operational sites in the West Country.
The directors had originally established the business in the 1980s and had since introduced two subsidiary companies, one focusing on waste transfer and the other on recycling.
The directors were looking to raise capital for two reasons:
1. To repay their existing lender with the hope of getting better terms elsewhere
2. To raise funds for improvements to one of waste transfer sites in the South East
Keen to secure a fixed rate with a minimum initial term of 5 years, the directors wanted to raise a total of £490k.
Due to the complexity of the case we needed to approach a lender which would be willing to meet with the client and take the time to understand the full application, including the structure of the businesses.
Firstly, we worked with the broker and his clients to produce a proposal which we then took to the commercial team at a well-established high street bank. Impressed with the proposals, the commercial manager then took the time to get to know the directors and their business. This included visiting the sites in question. The bank subsequently agreed to lend the amount requested, structured as two separate facilities:
1. A commercial mortgage of £190,000
This would replace the existing finance (on a like for like basis), i.e. with the security held on the West Country site.
2. A flexible business loan of £300,000
Secured with a fixed and floating charge debenture over both the parent company and the subsidiary, as well as a cross-company guarantee.
The directors were more than happy with this offer and the deal is expected to complete in June 2017.