Scenario

We received a referral from a national firm of mortgage brokers who had a client who was looking to purchase a commercial property for £400,000 and so needed a commercial mortgage to purchase the office. The client wanted to purchase an office in a new Limited Company and let the property to his trading limited company, which is a regional firm of chartered surveyors. The firm would then relocate out of their rented offices, into the larger premises, allowing them to grow their operations.

Problem

When the client spoke with us he advised that he already had a loan offer with a lender, via another broker, which was advanced in stage. A valuation had been undertaken, and on full review the lender limited their loan to value to 65%, meaning the client would need to find additional deposit monies. The lender also would not fund the VAT on purchase, and so he would need to find £80,000 to cover this cost until he could reclaim the VAT 3 months later.

He therefore commissioned us to source an alternative lender who would lend 75% loan to value as well as fund the VAT on purchase. As the transaction was already well advanced he needed the purchase to take place within a 6 week timescale.

Solution

After a full fact find our specialist commercial finance brokers shortlisted 2 viable commercial mortgage options for the office, with the client then requesting that we proceed to full underwriting with both in order to maximise the chances of success. We then received full offers from both lenders. The first was with a specialist lender, offering a cheaper 5 year fixed rate with the ability to use the existing valuation in order to save time. The second option was a high street bank offering a more expensive 15 year fix, but with no Early Repayment Charges, meaning he could be protected against future rate rises while having the ability to refinance to a cheaper rate elsewhere if the market improves.

The client decided to proceed with the high street bank, who also offered to fund the £80,000 VAT payment on a short term loan. We then coordinated the bank manager, valuer and solicitors in order to expediate the completion and hit the completion deadline