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Archive for the ‘Case Studies’ Category

Case Study: Short Term Loan for Addition of another BTL to Portfolio

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Shawbrook is pleased to report the completion of a short-term loan at 55% LTV, for a client of Strategic Partner ‘Searchlight Finance’. The purpose of the loan was to raise funds for the purchase of another investment property, with the client having very recently transferred ownership of a buy-to-let (BTL) property from their individual name to a limited company via a special purpose vehicle (SPV).

Shawbrook has completed on loans for a number of clients in a similar position, establishing an internal support framework which can process SPV transactions as efficiently as possible. In this case, the broker’s client already had another loan with Shawbrook, enabling them to benefit from the Existing Customer Discount and expediting the application process for all parties.

The client was initially unable to provide the shareholding structure of the new SPV to the Bank, because they were awaiting the appropriate security codes from Companies House in order to update their annual return documents. As Searchlight’s client was known to the Bank, Shawbrook was able to take a pragmatic view and issue the IMO without this information, making it a pre-completion requirement instead.

There were some initial discrepancies concerning the property title plan, whereby the documentation provided seemed to indicate the footprint of buildings previously on site and not forming the boundaries of the newly built development. This created difficulties for our legal partners at Pure Law in terms of finalising a definitive boundary plan, but these were overcome by the efforts of both the Shawbrook lending teams and Searchlight Finance.

With open communication channels ensuring all outstanding information was shared as needed, the Shawbrook lending teams were able to move to completion to the satisfaction of the client.

The broker, Simon Allen from Searchlight Finance, commented:

“My client was pleased with the outcome of their application process with Shawbrook and, as a repeat customer, is open to seeking finance from Shawbrook again in the future.

“From a broker’s standpoint, the interaction with Shawbrook lending teams was as Searchlight Finance has come to expect – expert, pragmatic and always able to take an informed view throughout the lending process.”

£300,000 refinance of New Build Flats

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A Cheshire based company had built four apartments with a total land and build cost of £200,000 and the properties were valued at £440,000.

Lenders had been approached by our clients and all were either not interested as they were property developers, or wanted them to leave some of their money in the project so they only had had access to a maximum loan of £180,000.

By getting to know their medium and long term strategy we presented this to a specialist property lender. By outlining their plans the lender was satisfied that the company had a long term viable plan which they wanted to support and offered 75% of the value to them.

So we have two happy directors who now have an extra £150,000 to go towards their next project.

£330,000 refinance from Yorkshire Bank

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Due to their withdrawal from the market Yorkshire had given notice to a long established Lancashire property company to move it’s property portfolio to another bank or sell.

The directors were in their 80’s and spent most of their time overseas and didn’t own a main residence in this country. To add to this their tenants received housing benefit which most of the bank’s didn’t like.

Due to our dealings with the Banks we kept in constant contact with the outgoing lender and updated them at every stage. This gave the bank the confidence to grant extra time in a complicated restructuring.

Never to back away from a challenge we arranged with the directors for a UK based relative to become a director. This gave a new bank comfort in succession planning and where other brokers had failed we obtained the finance needed. The properties have been retained giving the clients a comfortable income in their well earned retirement.

Refurbishment Loan with lender funding 100% of refurbishment costs

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Criteria

Up to the 55% of current value or 80% of purchase price

  • Refurbishment costs 100%
  • Gross facility up to 55% of end sales value
  • Loan size £200,000- £1m
  • Term -12 months
  • Minimum value £300,000
  • Works no more than 30% of current value
  • Type of works-non structural
  • Experience essential

 

 

 

Auction Finance in Leeds

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We were approached by a residential mortgage broker who had a client that had purchased a residential investment property at auction. They thought they would be able to obtain finance from their bank but their request was declined.

Due to the tight deadline bridging finance was considered but we were confident that we could raise long term finance within the time limit. The loan application was received and due to our strong relationship with Shawbrook we rang them to ask them to put it to the top of their workload. This was done and we obtained agreement. As a partner of Shawbrook we are able to instruct valuations so the valuer was then instructed and visited the property the next day with the valuation report being received the day after.

A formal offer was then issued and it was down to solicitors to finish the hard work that all parties had put in. As we are copied in on all solicitors correspondence issues were identified early and dealt with quickly.

The deadline was achieved and the clients now have a new addition to their property portfolio.

Bridging Finance in London £900,000

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A corporate finance house in Manchester had a client who was buying a business in the South West. They had been let down by a Venture Capital company and were looking for alternative funding. The purchaser had a property with no mortgage and wanted to obtain a bridging loan of £900,000 quickly.

Other lenders and brokers had already been approached.  Initially we gave an overview of the lenders that had offered finance and outlined the positives and negatives to the loans and the lenders.

As the repayment was to come from the sale of the property we considered lenders that would offer extensions to the loan if the sale took time. Cost was also important and knowing that the lender had the money to complete.

Due to our experience in the sector and detailed knowledge of the lenders we were chosen to source the finance and the client obtained a 12 month loan, interest calculated on a daily basis with no exit fee.

The house is on the market and they now own a very profitable business.

Bridging Finance for Auction Purchase

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We were approached by an IFA who had tried to obtain bridging finance of £350,000 on a property bought at auction. The client and IFA had approached lenders direct and the IFA had gone to a specialist bridging firm who couldn’t help.

A 10% deposit had been paid at auction and we had less than two weeks to obtain the finance. The buyer was very anxious about losing the deposit and being sued by the seller.

The property was almost derelict and was putting the lenders off. We found out early on that the family were wealthy and had other assets including a profitable hotel which was available as security.

We approached several of our lenders and we met with the owner of the bridging company chosen and gave a presentation to them which explained the transaction in detail and outlined all the risks.  Due to this they didn’t want a valuation and the money was released the day before the deadline.

We negotiated the ability for the business to reduce the debt during the period of the loan to lower interest costs and the house is now being restored and will be back to its former grandeur in the Derbyshire countryside.

Buy to Let Remortgage

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Manchester based property investor required a buy to let loan to repay bridging finance. Due to his profession and the large number of properties he owned within his existing portfolio he had been turned down by lenders.

The bridging company was putting pressure on the client for repayment. We quickly sourced an alternative lender from our specialist property lender panel and repaid the bridging loan.

Bridging Loan in Devon £412,000

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Bridging loan to Torquay based developer to repay existing development loan with another lender which had expired. Introduced to us by their residential broker.Negotiated with lenders to reduce the number of properties held as security thus maximising remortgage options and reducing the amount of interest charged.

Agreed over a nine month term which was sufficient time to sell or remortgage further units without the pressure of distressed sales.

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Searchlight Finance Limited is registered in England and Wales No.07929050 Searchlight Finance Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (http://www.fca.org.uk/register) under reference 743220. The FCA do not regulate Business Buy to Let Mortgages or most Commercial Mortgages and Bridging Finance. ICO Number Z3109319. Your property may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it.

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