The client: A landlord in her late 50s looking to purchase a gift shop which had recently been put on the market in her local village. Wanting to take on this venture, the client approached us for help in sourcing finance.
Apart from the rent she receives from her two buy to let properties, the applicant has no other form of income and no experience in running a business. Her husband’s wage covers her living expenses.
The property: The gift shop valued at £125,000 is situated in a tourist area of Somerset. The gift shop has been running as a successful business for over 20 years.
The finance: To purchase the business the client was looking for a loan of £81,000. She had managed to save up a large deposit from the income she receives from her rental properties. She had requested a loan term of over 10 years on a capital and repayment basis.
The application process: We approached a high street bank which is willing to lend to applicants with no experience in running a business, if the business being purchased has strong recent figures and the applicant is willing to provide a personal guarantee. There are of course some exceptions to this.
We provided the bank with the business’ last two years of accounts, a copy of the client’s personal bank statement and proof of ID and address.
Happy with the figures provided an offer was made. Here are the details of the deal:
Property value: £125,000
Loan amount: £81,000
Rate: 2.3% over Bank Rate
Term: 15 years capital and repayment
Mortgage payment: £567
Lender arrangement fee: 2%
Consultant: Paul Keddy, 01732 471655
25th October 2018