Delivering 2nd charge funding for a conversion project

Loan Amount:
£640,000

Property Value:
£2,815,000

LTV:
70%

Funding a major refurbishment project can prove challenging, especially where refinancing and/or 2^nd charge facilities are involved. A client required specialist finance to support plans to convert a commercial building into residential – incorporating multiple units. Luckily, we are experts in facilitating these kinds of projects.

However, before we could progress, we needed to ensure plans were in place to wrap up an existing facility. Given the complexities, this deal could have been delayed by several unforeseen issues. This would have been disastrous, considering the client needed to complete quickly.

Fortunately, the underwriter involved considered the experience of the underlying investor. They also incorporated the borrowers’ wider assets to support the application and keep the deal moving.

Looking at the wider picture

To support our 2^nd charge loan, we explored the borrower’s wider portfolio and experience in the market. With multiple assets to their name, coupled with their expertise in the field, we felt reassured that the investment would be stable in the face of any challenges.

We also worked with the borrower’s legal advisor to put plans in place to make sure the existing charge against the property didn’t slow down our efforts.

Looking to the long-term, we noted the borrower had a lot of experience in these types of renovations, which boded well for the investment’s success. Also, the property was in a good location with plenty of interest in the area for residential property.

With all this in mind, and given the fact that the exit strategy was strong with back-up options available, we delivered funding.

Providing flexibility in an inflexible industry

Incorporating a borrower’s wider assets into the mix may be especially useful in the current market. Mainstream lenders have become more cautious about lending in recent months. Criteria has been tightened, and many lenders have moved away from riskier deals. There may not be much appetite for complicated cases.

Assessments may only get even stricter over the coming months as affordability tightens. Fortunately, specialist finance is there for those who struggle to progress on the high street. Our experience in lending means we can be flexible regarding income, credit blips, and complex corporate set ups.

What’s more, our loans provide multiple options for boosting affordability and covering repayments. Even for substantial development exit or conversion plans. To find out more about our range of options, feel free to reach out to us.