Transport & Logistics Company – Case Study
Transport & Logistics Company – Case Study Recently one of our network partners was approached by a transport and logistics company, with depots in Suffolk and Glasgow. The Glasgow depot was a specialist cold storage depot used for storing principally frozen fish a new service being offered by the clients’ business as a specific response to the possible adverse impact due to Brexit. The client entered in to a 2-year lease in 2019 with the landlord. The lease included an option for our client to purchase the target property at £1.2m, this being the value of the target asset in 2018, when the landlord was looking to rent/sell the asset. When our client was in a position to purchase the Target Property (November/December 2020) due to the improvement works undertaken by our client since occupation and an improvement in market conditions for assets of this nature the target asset had increased in value to £1.5m. The client approached Brokerplan Partner Mark Everard of Michaels Commercial Finance as they needed the help of someone with commercial finance knowledge to assist them in identifying a source of funding to purchase the target property, at the pre-agreed price of £1.2m as per the lease agreement, after having struggled to secure the required funding from the clients’ own bank. After the client reached out, our Brokerplan Partner contacted Head Office to discuss the proposal with our Senior Case Manager – Peter Leonard Ideally, the client was looking for a 70% Commercial Mortgage assessed against the Vacant Possession Value of £1.5m, rather than against the Purchase Price of £1.2m. The issue is that a majority of commercial funders are only prepared to lend against the lower of Purchase Price or Valuation i.e. £1.2m. However, Aldermore are prepared to consider advancing 70% against the Vacant Possession value where the borrower is the existing tenant. Therefore, Aldermore were considered the most suitable fit given the clients funding requirements. However, whilst the rate was competitive, we wanted to provide the client with an option from a Tier 1 lender, we therefore made an approach to TSB and whilst the interest terms were lower than those secured with Aldermore, the maximum advance would be restricted to 70% of the Purchase Price i.e. £1.2m. This would require the client to find a further £210,000 deposit than compared with the offer from Aldermore. Having provided both options to the client, it was agreed to progress with the Indicative Terms received from Aldermore. Having provided Aldermore with the relevant information including Financials, Management Information including a list of the clients existing financial commitments. Formal credit approval was achieved within 7-working days which was subject to a number of conditions. Between the Client, the Brokerplan Partner and Head Office, these conditions were quickly satisfied allowing the case to complete within 6-weeks of achieving credit approval due to the close involvement of all parties including the respective legal advisers from both sides. This case generated a total of £10,500 in commissions, but more crucially has now allowed the client to move forward, in the knowledge that the purchase of the property has secured the long-term future of the business as well as annual saving in excess of £60,000 per annum being the difference between the annual rent and the annual commercial mortgage payments. To find out how you too can become a successful commercial broker email info@brokerplan.co.uk to receive our brochure or call 0333 405 6666 to speak to a member of our business development team.
Recent Deal Summaries
Recent Deal Summaries A recently completed deal, from one of our partners and it’s their first case. A bridging loan of £216,000 for a property development in Doncaster through Affirmative Finance landing them a £2,106 commission! Client had a property in a SIPP Pension that the beneficiaries wished to convert to and operate as a coffee shop, we managed to secure an asset finance loan with Eastern Credit to help the client with this project One of our partners recently secured a £340k Day 1 Development Bridge Loan for a client – Who’s project was a new build single dwelling. The deal with secured with lender Golden Tree. The commission generated on the deal was £3,400
Recent Case Studies
Recent Case Studies £30k Scaffolding Deal Deal placed with Bibby Financial Services Established scaffolding contractor trading 17 years needed additional scaffolding to help service pipeline of work. The business did make a loss in 2020 but latest management figures show a turnaround back to profitability, balance sheet remains strong, directors have clean credit searches and are homeowners. The deal was accepted on 3+33 profile with DG’s from both directors at our scaffolding rate net 14%. Documents were emailed for signing and once the originals were received and the client confirmed they had received all the goods on site and was happy for payment to be release both the broker and supplier were paid by same day transfer. Partner Commission £3,000
Regulated Bridging Case Study
Regulated Bridging Case Study The client already owned a property unencumbered, which was valued at £170,000 and wanted to spend £100,000 making it her forever home. However, the anticipated GDV was £210,000, so the maths didn’t really work. The client had already approached other brokers but weren’t happy with the rates received. Part of the application, would be to add her partner to the deeds. He had an unsatisfied CCJ, which also had to be taken into account. The introducer had already secured an AIP for the exit. After several rejections, West One Loans, could see the bigger picture and understand that the deal would work as the total borrowing was still relatively low loan to value. We secured terms at 0.9% per month and the case completed on 17th November, much to the applicants delight. Great support from Mark Hedley and Simon Boghurst at West One to a successful completion.
Canary Wharf BTL
Canary Wharf BTL Limited company application for the purchase of a BTL in Canary Wharf completed with the support of Landbay. The clients were first-time landlords and had purchased the property off-plan with a completion date set for March 2020. This had a restricted lender panel as the property was a new build in a block with 42 stories. The purchase price was £960,000 and a 20% deposit had been paid. Due to the rental income and restrictions applied following the coronavirus outbreak, the maximum loan available was £720,000 and the applicants had to increase their contribution. Following the valuation, the rental income was reduced from an anticipated £3500 to £2850 pcm. The lender then applied an additional restriction as they were first-time landlords and increased the stress test to 135% at pay rate as opposed to 125% which would have made the purchase impossible. The applicant has managed her father’s properties for some time and, as a compromise, the lender accepted confirmation that she had experience from this as an exception and reverted back to the originally agreed sum. Additional requirements: EWS1 form as the property is a block of flats (new legislation following the Grenfell disaster) Reinspection to ensure all works were complete prior to completion There were delays due to the lockdown and the building wasn’t completed until October. The original enquiry came in in December 2019.
Waterloo Lodge Re-Finance
Waterloo Lodge Re-Finance Refinance of a stunning holiday home in Scotland to raise funds to build additional similar properties. The security is a timber framed wooden clad holiday home in a relatively remote area on the West coast of Scotland. Bookings have always been good but this came to us at the start of a global pandemic, luckily this hasn’t had a lasting effect due to the staycation market. The client is an ex-pat living in the USA and he had previously lived in the property. Cambridge and Counties could see the potential in the project and were fully supportive from day 1. There were some complications and the client had to produce a lot of documentation before it went to offer as he was overseas. Cambridge and Counties originally offered a loan of £250,000 against a valuation of £450,000 but were able to increase that to £270,000 following underwriting. The client was offered and accepted terms of 4.5% OBR with a 2% arrangement fee. The AR charged 1.25% for his work which started in April and involved a lot of contact with the client at inconvenient times due to his overseas location. The total gross income was £6075.
Lockdown Case Studies
Lockdown Case Studies Scottish Development Company Recently completed on a loan worth a total of £584,500, gross income £8767.50 – this included a 1% broker fee. The applicants are experienced property developers who have developed the former Panmure Hotel in Monifieth in Scotland into 9 luxury apartments https://thorntons-property.co.uk/Panmure-Apartments-Tay-Street-Monifieth-New-Build Due to the slower property market during the pandemic, the clients decided to let two of the flats and finance them in order to repay JV investors. As part of the deal they also financed a property that they were taking in exchange on a different development. The purchasers were doing a straight swap with their current residential so the clients purchased their residential property on a BTL basis, thus adding that property into their portfolio. The following difficulties were overcome by excellent client management by the AR and coordinated working with the BDM at Paragon: Properties are in Scotland with a limited lender market Security was held in a development company – this was surpassed by setting up a new SPV with the development company as 100% shareholder The clients had no BTL experience – they had requested more properties initially but compromised on the maximum available by Paragon LTV was restricted at underwriting to 70% due to the in-experience The case was presented to us April and completed 11th August, however the actual application with Paragon wasn’t submitted until 3rd June, so was only actually a 10 week process including some complicated legals. We are hopeful that we will now be able to place additional properties from a different development for the clients with Paragon moving forward. Buy to Let Purchase Client purchased a 3 bed flat in Watford for £325,000, this included a share of the freehold. As a high rate tax payer, the client decided to purchase his first BTL in a limited company. As a prime case, following a full fact find with the client, the case was submitted to The Mortgage Works on 2.84% fixed for two years. The application was submitted on 10th June and completed 18th August in the middle of a pandemic. Gross total fee income £1689.37.
2x Commercial Mortgages – £2.3m of Funding
2x Commercial Mortgages – £2.3m of Funding Client: Limited Company Executive Summary: Client was a highly experienced property developer/investor located in the North West The client overall portfolio consisted of 136 Residential Units and 11 Commercial Units, with a combined value of c£18m vs. v£9m of debt All debt is on a fully amortising basis Debt was spread with a mixture of Tier 1 and Tier 2 lenders In 2018 the client had purchased an empty retail outlet on the ground floor with two floors of empty office space above consisting of over 30,000 square feet of space Successfully achieved planning approval for 28 apartments (split between 1 and 2 bedroom units) and 3 commercial units on the ground floor. The smallest residential unit was c45 square meters Due to the overall size of the project, client split the property into two separate freehold titles WRF successfully refinanced the 1st Stage where we manged to raise £1,098,500 Due to the success of the 1st Phase WRF were invited to source long term funding for Phase 2 The 2nd Phase was to create a large commercial unit (Dance Studio) and 16 x 1 bedroom apartments on the upper two floors As per the 1st Phase the client created 17 individual 125 leases, with the freehold being held by the ‘Groups’ holding company The commercial unit was completed at the end of 2019, with a 5-year lease being in place generating an income of £30,000 which increased to £42,000 by the end of the 5th year All 16 residential units were immediately let by way of standard AST agreements generating £124,800 in annual rent Client estimated an indicative value of c£1.695m across all 16 units, with the commercial unit having a value of £400K Client Requirement Client wanted to borrow up to 75% of the indicative value of the residential properties and 70% in respect of the commercial Client was looking to complete quickly to enable the client to purchase further property for conversation The client wanted a fully amortising facility over the committed term Background The client made a direct approach to the Client Manager within the practice with whom he had undertaken 3 successful facilities whilst the Client Manager was working at Aldermore before joining Whiterose Finance as a Senior Client Manager Client Manager’s Approach The client manager made contact with Redwood who had funded Phase 1 of the project and understood the client operation as well as the quality of the accommodation As with Phase 1, the Client Manager provided Redwood with a detailed synopsis of the proposal along with the client’s requirements The client manager received a very positive response from the funder with indicative terms, which split the commercial properties from the residential properties Due to the quality of the client and the overall proposal Redwood was happy to recommend a reduction in their standard interest rates across both residential and commercial Events to Completion Head of Credit approved the facility within a 48-hr period – bearing in mind the case also had to supported by the banks credit committee Valuation date set for the Commercial Unit which was already let in Feb 2020 Valuation approved and legal work completed allowing the client to raise c£300k by the end of Feb 2020 Whilst COVID-19 had an impact on delaying the construction of the 16 residential units – however by the end of May all units ad been finished and fully let with tenants expected to move in 1st June Valuer arranged a site visit w/c 25th May and completed his report by 2nd June Report approved by the lender on 3rd June All legal work had been completed between March and end of May therefore client was only waiting for valuation report The loan facility of £1.186m was funded by on the 4th June § The two facilities detailed above generated c£17,811 in fee income received from Redwood Bank. Taking into account Phase 1 of the project total fee income currently generated from this client amounts to c£28,000 – time period 8-months Email received form the client following completion: “Guys. What can I say – the service and commerciality to dealing with each and every one of you is exceptional. Thank you for pulling this out the bag once again!!! We have now secured 3 more acquisitions so here are to many more deals ahead”
£200k Business Loan Case Study
£200k Business Loan Case Study Requirement: Business Loan A long and well firm of Quantity Surveyors based in Renfrewshire specialising in construction dispute and contract consultancy The 3 directors completed a Management Buy Out in November 2018 which saw the original owner exist the business Projects undertaken have been throughout the UK, and as far as Spain Portugal France Germany Croatia and more recently Malta The contract in Malta will cover a period of 2-years with options to extend for a further 3-years Rather than putting it’s staff up in Hotels whilst working on the contract the directors wanted to purchase a company house – as part of the contract all accommodation expenses are to be covered by the client, therefore the company will be charging its client the hotel rate which they would have charged the client for a nights/weeks accommodation in a Hotel The clients were happy to provide a 33% deposit towards the proposed purchase Business had a strong balance sheet and was profitable with serviceability easily being proven from the last 3-years accounts The business had significant cash balances and could have used these in-order to purchase a property without the need to borrow. However, the directors did not wish to tie all their surplus cash on the purchase – hence the need for a Business Loan Whilst the business was financially strong, it had little in the way of tangible assets it could use as security for the proposed facility Therefore, the client was looking for an unsecured facility repayable over a period of between 5-10 years Given the strength of the business and its financial performance a repayment term of 5-years could easily be met with the estimated serviceability being met by 10x against the Adjusted EBITDA (Earnings Before Interest Tax and Depreciation) Approaches were made to the traditional Tier 1 banks, but neither wanted to help on an unsecured basis (other than a Debenture and unsupported director guarantee) We then made approach to Funding Circle and ESME. A formal offer was received at an Interest rate of 0.42% per month equating to an annual rate of 5.04% For strong credit worthy business going to alternative finance providers does not mean the client will be charged a higher interest rate as the above proves The Above Case earned a Gross Fee Income of £6,000 Please Note this case was completed during the current COVID-19 crisis showing lending is still being achieved.
Two Recent Partner Deals
Two Recent Partner Deals Bridge-to-Term Facility Completion this week: A developer who had arranged the original finance through our partner wanted to refinance from the bridge onto a BTL term loan. The deal was for three linked properties, with a total loan of £810,000. With proc fee from our partners Shawbrook and a generous FSA fee, there was a total of £22,092 fee income. Buy-to-Let Refinance This month we have also refinanced a BTL property through our regulated route with Virgin Money. With three applicants and the property being adjacent to the family home, the lender was able to get comfortable that the tenants were not related and agreed to lend £239,000. The total fee income for this case was £1570.50 and was the AR’s first case over the line. More About Brokerplan Brokerplan is a compelling opportunity for anyone looking to generate a significant income from becoming a Commercial Finance Broker. Established in 2004, bringing years of experience in the industry, we provide all the tools you need to succeed in the industry. Our expert support and wide range of Finance Broker packages mean that there is an option for everyone. More About Us
