Mortgages for Business is committed to keeping both our staff and clients safe during the COVID-19 outbreak while maintaining the best service possible. Our teams are working from home, but don’t worry, you can still contact us in the usual ways.
To read our comprehensive FAQ guide on how the emergency interest rate reduction and Coronavirus outbreak could affect your mortgage, please click here.
If you want to request a payment holiday, please contact your lender directly. For lender contact details, click here.
Alternative Development Finance Solution for Unmortgageable Petrol Station

Alternative Development Finance Solution for Unmortgageable Petrol Station

06.12.19 | Written by: Peter Barnes

The Client: An experienced businessman who owned and ran a petrol station in the south of England.

The Property: The client owned the freehold for the business, as well as his own home for which he had a £414,000 mortgage. Both of these properties held a good amount of equity in them.

The Finance: The client needed to release equity to pay for some minor refurbishments to the business' property and to make general updates to the retail unit within, to ensure it remained a popular stop for customers. He wanted to release equity from the business property through remortgaging.

The Challenge: Despite providing evidence of the business’ strong profits the existing High Street bank, who loaned the original commercial mortgage with the business property as security, refused to remortgage the property and release the funds for the works. Many High Street banks are currently reluctant to lend to petrol stations as they are seen as too much of a risk. This left the client in a difficult position as, without the finance, they were unable to grow and develop the business.

The Solution: When the client came to us, we were able to approach a more specialist lender with his case. Rather than releasing funds through a remortgage, the lender agreed to grant a loan in the client’s personal name with a second charge over his residential property, but with the understanding that the funds were to be used for the business’ required works to strengthen the trading operation. Despite being in the client’s personal name, the repayments can be charged back to the trading business. The client was thrilled we were able to source an alternative solution, allowing him to receive the finance to make the required changes to the business and develop its future. Here are the details:

Residential Property Value: £795,000

2nd Charge Business Loan: £110,000

Rate: 6.49%, interest-only

Lender Arrangement Fee: 2.4% added to loan

Personal name

Consultant: Peter Barnes, 01732 471641 

 

>> Sign up to our weekly newsletter

If you would like to discuss any of the above points or have any questions around the matter, please feel free to contact me on my direct dial 01732 471641 or you can email me: 

ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

NB: ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Get in contact with us: 0345 345 6788 or ...

Submit an enquiry
Arrange a call back