Clients: Edinburgh-based couple, UK residents but US and UK nationals
Loan requirements: £890,000 to repay a first and second charge taken out to grow a business, consolidating the debt
Property: £2.3 million property in central Edinburgh
Product: 5-year fixed rate at 5.55%
In this case, we were approached by a couple residing in Scotland. They were looking for a loan of £890,000 that they wanted to use to repay a first and second-charge loan that they had taken against their property, essentially consolidating the debt. The couple, successful business owners had originally taken out the loan to allow them to invest capital into their business to support its growth.
The case was particularly complicated for a number of reasons, which included the fact that one of the individuals was an American citizen and the other, while a UK national and resident, earned in US dollars. The fact that there was an American borrower involved in the deal along with a multi-currency element made sourcing a competitive deal a challenge, as many banks won’t commit to lending given the very stringent and time-consuming regulatory checks needed to lend to an American national. The case was also a challenge because the property was in Scotland (which has very different property laws and can mean that mainstream private banks can’t lend) and because the couple didn’t meet traditional affordability parameters set by lenders, although they had a solid asset base and financial background.
Usually, it’s not possible to lend from private banks in deals of less than £1 million, but in this case, we were able to negotiate with a private bank on the basis of the couple’s overall net worth. We presented the case to the bank in the best possible light, highlighting the clients’ significant cash reserves, and underlining that they were, in fact, suitable for a loan despite not meeting standard affordability limits. We ultimately negotiated a five-year fixed rate of 5.5% against the client’s Edinburgh property valued at £2.3 million.