- Client: British National & Resident
- Property: Commercial dental clinic
- Property value: £615,000
- Loan amount: £615,000 including rolled interest and fees
- Structure: 80% secured against the property, with the balance secured against cash held in the client’s SIPP
- Rate: 2.4% over base rate, variable, over 25 years
Enness was approached by a British client who was looking to purchase a commercial property from which to operate a dental clinic. The property was valued at £615,000, and the client wanted to fund the entire purchase rather than contribute a cash deposit.
The challenge was finding a lender comfortable with a 100% funding structure. Rather than treating the property purchase in isolation, Enness looked at the client’s wider assets and considered how these could be used to structure the finance.
The solution combined lending against the commercial property with additional security over cash held within the client’s Self-Invested Personal Pension (SIPP). This allowed the full purchase price to be funded, with 80% of the lending secured against the property and the remaining 20% against the cash held in the SIPP.
The resulting facility provided £615,000 of funding, including rolled interest and fees, at a variable rate of 2.4% over base rate. The facility was structured over 25 years, giving the client a longer repayment period and helping to manage the ongoing monthly cost of the borrowing.
For a commercial property purchase, the ability to look beyond the property itself can be important when a client wants to maximise available funding. In this case, combining two forms of security allowed Enness to create a structure that met the client’s objective without requiring a conventional cash deposit.
The case demonstrates how a bespoke approach can be particularly useful where a standard commercial mortgage does not provide the level of funding required. Enness has experience structuring commercial property finance around the wider financial position of the borrower, including complex security arrangements and higher-LTV requirements.
If you are looking to purchase commercial property and want to explore how your existing assets could support the funding required, speak to Enness about your commercial property finance requirements.
Risk Warning:
Borrowing secured against property or other assets carries risk. If you do not meet the terms of the facility, the lender may take enforcement action against the assets provided as security. The value of investments can fall as well as rise, and using assets as security may expose them to loss.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, lender criteria and the suitability of the proposed security. Terms and availability will vary depending on individual circumstances.
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.
