Showing Patience and Forbearance in the Face of the Most Difficult of Circumstances

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Sometimes, we need to adapt to life’s more tragic realities. Sadly, a property investment plan can be derailed by a divorce, bankruptcy, or recent death.

This may be especially true with corporate borrowers. Shareholders hold certain sway over a company’s operations based on how many shares they own. If they die, their shares fall into the probate system, adding complexity and potential delays to an already stressful situation.

“I’ve seen some substantial commercial deals derailed by these kinds of issues,” said Matthew Lewis, our underwriter.

“Think 30-bedroom care homes, or sprawling logistic hubs.”

With a death, the situation can be made especially complicated where the shareholder(s) was an offshore national. This could create delays even where they are residing in the UK, and have a lot of experience in their sector.

Still, even with the added difficulties, we would do what we could to progress a deal.

As Matthew explained: “If we were helping a company invest in a care home, as an example, which recently experienced a death, we’d start by making sure the company’s underlying finances were solid.

“I’d start by looking at the accounts. Those of the care home being invested into, and the borrowing company. Then, I’d make sure the client’s details fit in with our criteria – the LTV, gross loan amount, term length etc.

“From here, I’d determine if the probate situation would actually hold back our case. The key thing to determine would be if the shares held in probate represented a majority shareholding. If it didn’t, we’d be able to progress without probate being granted.”

The situation would be different if it was a majority shareholding. In that case, we’d have to wait for probate to be granted, but we would be in close contact with the solicitors involved throughout to keep on top of things.

These realities are never straightforward or easy. But, we are prepared for them at Market Financial Solutions.

“Our funding can accommodate these difficult scenarios,” Matthew said.

“Our loans can be put towards probate concerns, executors, inheritance tax bills, and more.”

All of our products – from our residential bridging loans through to our Bridge Fusion deals –  are designed from the ground up to accommodate the real financial world. If your clients are in particularly tricky circumstances, we’re here for you.

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