I recently helped a client who was looking to buy his own office space worth £1.6million, as he was renting at the time. The office in question was London-based and would offer much more space to allow my client to grow his business.
My client was a medical professional with his own business, providing advice and remote medical support. Having founded the company 10 years ago, his business was now growing steadily, meaning that it was now necessary for him to acquire a new office space to support this growth.
After being unfairly treated by his previous bank, and being turned away by various different lenders, my client approached Enness after hearing of our expert handling of complex financial requirements.
One of the key issues as to why he had struggled to secure a solution before approaching Enness, was the level of concentration risk surrounding his case – his business was running off one major contract at the time. The banks and lenders he approached previously had all been concerned that if this contract were to stop, the business would fold.
A further complication came as despite having been a business for the last 10 years, my client’s company performance had been below expectation in the previous financial year due to change in the business model.
To overcome these obstacles, I was first able to demonstrate that my client’s mortgage payment would be below his existing rental payment, and therefore dispel any apprehensions concerning affordability.
Secondly, with the help of my client, we could demonstrate that more contracts were in the pipeline this year, which would diminish reliance on the existing contract and therefore reduce any associated risks.
As I knew that high street lenders were not an option, I approached a commercial bank who could produce the best terms and were satisfied that we could provide enough evidence that future contracts were imminent.
In light of this, I was able to secure a first charge over the £1.6million property at 70% loan to value (LTV). This was for a loan size of £1.2million at 3.00% above the base rate over a period of 5 years, with 15 years of amortisation. Further, Enness can also arrange an exceptional invoice factoring facility, which my client has decided to proceed with in order to aid his cash flow whilst waiting for an outstanding invoice to be paid.