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Case Studies

Is the impossible possible?

Problem – Nursing Home purchase with no relevant experience!

Our client was an experienced property developer and he was looking at purchasing a vacant nursing home with a view to obtaining planning to increase the number of rooms and trade as a going concern. There were several issues with this from the outset but that didn’t mean there wasn’t a solution.

The first obstacle was the client having no experience in the nursing home sector which is an essential requirement for the majority of lenders and there was no Care Quality Commission licence in place.

The final issue was the nursing home had been vacant so had no trading accounts to use as income for a commercial term lender.

Short term solution:

Total Loan Amount Required – £400,000

The client initially required short term funding to complete the renovation of the property and the build out of the additional rooms. The property was already in good condition, the client was able to obtain planning permission from the council and needed the funds to complete the work.

We were able to approach one of our short-term lenders and present a solid case summary to them, utilising the client’s property development experience to negate their concerns with the lack of experience in this sector. (part of our due diligence is to provide the short term lender with a robust term exit plan which is something our mortgage division took care of). Not only did the lender agree the facility for the client but they also released in stage payments allowing the client to manage the project without being charged interest on the full amount.

The client completed the renovation of the property, increasing the number of rooms and fitted out ready for trade.

Commercial Mortgage exit:

Loan amount required – £400,000

Although we were able to arrange funding for the client’s immediate requirements, the end goal for the client was to arrange a term mortgage allowing him to open as a trading business and run as a going concern.

Having the ability to structure and present a case correctly to a lender was paramount in getting the right outcome for our client.

Although the business had no trading accounts, we were able to leverage off the trading profits of his Buy to Let portfolio to prove disposable income to cover his commercial mortgage payments in the first year.

As we were able to present a solid case to the lenders credit committee they agreed to the release of funds on a term mortgage to repay the short-term facility.

This is another great example of us utilising our broad knowledge to deliver results for our clients, time and time again.

If you have a case which you feel might be impossible then why not give us a try.

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