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The Client’s Situation
Our client runs a very successful Chartered Surveying company and was looking to purchase a new office for the company to trade from in London.
The client’s company has been trading for over 20+ years and they were now looking to acquire an office space to trade from that they owned, rather than renting from a third party which is what they were doing at the time of enquiry.
The financial accounts of the business were very strong and the cash balance held within the company was also very strong – some of these funds that had been accumulated over the years would be used to go towards the deposit for the new purchase.
The Challenge
Our client wanted to purchase this property for his trading business to use, at a price of £932,500.
To keep the property ownership separate from the day to day running of the company, the client wanted to set up a new SPV ltd company that would be the entity that purchased the property, and once purchased they would rent the office to the trading business. Therefore the new company being set up would be the applicant for the mortgage.
They needed to move with speed as they had been looking for a long period to buy something suitable and didn’t want to lose out on this deal as the property spec / location / size was exactly what the client had been looking for.
The client’s main loan requirements were to have a long as possible term, on an interest only basis and at 75% LTV.
Our Solution
After speaking with the client and understanding what they wanted to achieve, I reached out to the appropriate lenders that can lend on these sorts of trading business scenarios with a full client/property referral, so we knew exactly what options we had to choose from when presenting the client with the quote.
Most lenders were happy to lend on this purchase, given the strength of the client profile and accounts of the business, however to get the length on the term to meet the client’s needs, they required the loan to be on a repayment basis, rather than interest only. Furthermore, LTV’s were restricted to 65% for some of the more competitive lenders.
However, we were able to identify a lender who could cater for all 3 of the client’s needs by issuing a 25 year interest only mortgage at 75% loan to value and this was the most competitive lender who could meet all 3 of the client’s key requirements.
The Result
We therefore proceeded with the application and instructed the valuation. The property was valued as expected at £932,500.
This lender was able to provide a 75% loan to value on the purchase price, which equated to a loan of £699,375.
This loan was issued on a 5 year fixed rate of 7.14% with a 3% arrangement fee added to the loan.
Client Feedback
“We couldn’t have asked for more from the great team at Advocate Finance and Henry Barley in the purchase of our new London office! A great experience in being taken care of, securing the right lending deal for us and in a very timely fashion. A genuine pleasure to work with Henry and his team – thanks guys!”
How can Advocate Finance help?
Are you interested in purchasing a property for your trading business? No matter the property type, we can assist and find you a solution to meet your needs.
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