Background
Our client, a commercial property investor, has owned a well-performing nursery asset for several years. The property is held freehold and occupied by a long-established childcare provider on a secure lease, offering reliable income with minimal management requirements. The client also owns the flat above the nursery, further strengthening their control over the asset and adding to the long-term value proposition.
Historically, the nursery had been financed through a facility with one lender. While this had served its purpose, the interest rate was now considerably above market norms, and the facility was nearing expiry.
The Challenge
The refinancing need was clear, but this wasn’t just about rate reduction. The client also wanted to release equity from the asset to repay another loan secured against a separate property, currently held with another lender. The challenge lay in structuring a refinance that met the following objectives:
Secure more competitive terms on the existing nursery debt, aligned with its low-risk profile.
Release capital for strategic debt consolidation elsewhere in the client’s portfolio.
Ensure lender comfort with the overall gearing and asset profile, particularly where the flat above the commercial unit was under the same ownership but not included in the security package.
The Approach
At P10, we positioned the deal as a straightforward, low-risk commercial refinance, with the added benefit of equity release, backed by conservative gearing and strong asset fundamentals.
Key to the approach was demonstrating:
The quality and longevity of the nursery tenant, including lease terms and covenant strength.
The client’s history with the asset, including longstanding ownership and proactive management.
The added control provided by the residential flat, despite it not forming part of the security, this reassured lenders about building integrity and future asset management.
A clear plan for the use of released capital, namely, reducing more expensive borrowing elsewhere in the client’s portfolio.
Our lender selection focused on institutions comfortable with single-asset loans at modest gearing, and with the capacity to look beyond surface-level complexity.
The Outcome
Refinance facility of £1,000,000 agreed
Moving away from the high-cost loan
Equity release successfully used to repay the other loan
The Takeaway
This deal highlights how refinancing isn’t just about switching lenders, it’s an opportunity to strategically improve your capital structure.
By engaging early, understanding the full picture, and structuring the narrative around long-term ownership and asset quality, P10 helped this client achieve more than just a better rate. They now benefit from a simplified, lower-cost portfolio, giving them greater freedom to pursue new opportunities or simply enjoy stronger day-to-day cash flow.
If you're carrying high-cost debt on strong assets, get in touch with P10. We’ll help you refinance on terms that reflect your position, not your paperwork.
