Hybrid Commercial Mortgage for Occupier/Landlord Trading Company
The Client: Compare and Recycle, a Trading Limited Company that run a comparison website for mobile phone recycling; connecting people that want to sell their unwanted mobile phones to businesses that refurbish and resell, or responsibly recycle them. The company had never owned property and rented its office space.
The Property: A sizeable Grade II listed property near the centre of a large town in Kent. The property contained seven office spaces over 3,000 square feet, was walking distance to the centre of town and had its own parking. There’s a high demand for commercial spaces like it in the area, making it a profitable and reliable investment for the growing business.
The Finance: The client rented a space in the building and had been offered the lease from their landlords. Having agreed on a price, our client planned to retain 23% of the property for their own office space, while renting out the rest of the office space to the existing tenants. They needed an 80% LTV hybrid mortgage which allowed for them to be both a commercial property occupier and investor.
The Challenge: The client had already approached their bank about the deal. They were offered a maximum of 60% LTV as the bank had reservations about lending to first-time commercial investors who would also be occupiers. Unable to produce a 40% deposit, but not wanting to give up, the clients came to us for help.
We immediately requested the company’s business accounts going back three years previous to begin building our clients case. From our specialist knowledge of commercial lenders, we knew which lenders were likely to lend to our client at 80% LTV.
The Solution: It was clear from the business’ accounts that the company turnover was increasing year on year and with good profitability. Having put together a case, we were able to approach two high street lenders, including their current bank who had previously turned them down. Using our existing connections to the bank’s relationship managers, we were able to pitch the client’s case at a higher level than they originally had access to by going direct. We demonstrated to the bank that the company was bringing in enough profit in it to cover the mortgage payments, even without the additional rental income from the other tenants. rom the case we presented, the bank was happy to offer the client's desired 80% LTV mortgage! Here are the details:
