- Client: British national and resident
- Property: London pub
- Property value: £1.39M
- Loan amount: £825k
- LTV: 60%
- Rate: 3.55% above BoE base rate
Enness was approached by British nationals and residents looking to refinance existing debt secured against a pub in London. With the hospitality sector facing continued challenges, the clients were looking for a more competitive financing structure that would reduce the cost of their existing borrowing.
The property was valued at £1.39M, with the required loan of £825k representing 60% LTV. The key objective was to replace the existing debt with a facility offering more manageable borrowing costs while retaining the property as an investment.
Given the nature of the security, the transaction required a lender with an appetite for hospitality assets. Enness explored specialist commercial finance options and identified an opportunity to use the Government Recovery Loan Scheme, which had been introduced to support businesses affected by the economic impact of the pandemic.
The resulting facility provided £825k of finance at a rate of 3.55% above Bank of England base rate. This enabled the clients to refinance the existing debt at a more competitive rate while maintaining borrowing at a moderate level against the value of the property.
Commercial property transactions can require a different approach from standard residential mortgages, particularly where the property is used for trading purposes. Understanding the underlying business, the property itself and the available specialist lending options can be important when structuring the right facility.
Enness works across the commercial property finance market, helping clients explore funding solutions for a range of property types and circumstances. The terms available will depend on the property, borrower, trading position, affordability and individual lender criteria.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, valuation, due diligence and lender criteria. The terms described relate to a historical transaction and are not indicative of current or future pricing. Government-backed lending schemes are subject to their own eligibility requirements and availability.
Risk Warning:
Commercial property finance involves financial risk. If you do not meet the terms of the facility, property provided as security may be at risk. Borrowers should consider affordability, business performance and the proposed repayment strategy before proceeding.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
