Case Study: £7.35m Commercial Mortgage for HNW Client

Loan Type: Commercial Mortgage   |   Amount: £7.35 million   |   LTV: 65%   |   Term: 25 years

Commercial lending can be challenging at the best of times with many, if not most of the high street lenders having fairly restrictive criteria, especially around income cover requirements. By working with Aria Finance our clients benefit from the relationships we hold with our extensive panel of lenders, stretching across the high street, challenger banks, specialist lenders, and private banks.

The Client: 

The client aged 78, who we have worked with for over 15 years, is the director of various companies, alongside his wife, and owns a large portfolio of rental properties which generate an approximate rental income of £1.25m. He is a seasoned property professional with a high-net worth.

The Situation:

An existing loan had expired, and the client was unable to renew with the existing provider as the debt size of the loan required, £7.35 million, was outside of their current policy. They had been granted a 3-month extension.

Within the client's portfolio, there were several complex properties, some being leasehold with just 50 years remaining, some expired and some vacant units. The age of the client added another level of complexity. 

Our Solution: 

We needed to work closely with the bank and the client to overcome the challenging aspects of the case. While the client's children were not named in the business as Directors, we were able to articulate a succession plan involving them which gave the bank confidence that the children would be able to take over from their father if he were to be unable to continue running it for any period of time.

Knowing the likely appetite of the lender for certain types of property we had to carefully consider a structure ahead of presentation to the lender to ensure the best outcome for the client. Even with the more complex properties, we were able to mitigate any concerns throughout the initial part of the process due to our thorough knowledge and understanding of the commercial lending market coupled with ability to get under the skin of a proposed transaction.

Benefits & Results: 

A challenging case with plenty of merit that needed experience to ensure the best outcome for the customer who was in a precarious situation with the time running out. 

In this instance our relationship with a key challenger Bank allowed us to find a suitable solution for our client, as well as managing the relationship closely with the outgoing Bank to agree timescales and process of redemption.