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Capital

£9.8m Semi-Commercial Asset Restructured at 4.79%

At P10 Financial Group our specialists are experienced at finding the right commercial lending solutions, even in some of the most complex of cases. When markets went into turmoil in October, it was imperative that any business looking to refinance their debt at this time had access to an adviser who was able to navigate the market in their best interest. In this transaction, P10 Financial were instructed to deliver a refinance of a development facility to a commercial term loan. The client had just finished building 45 units and 4 commercial units, which they were holding for long-term investment. Our role was to create the best lending solution in the market for them.

Market Turmoil

In October 2022, the government announced a mini-budget that sent the lending/banking markets into turmoil. This caused lenders to increase their pricing at the rate of knots as well as pulling completely from the market.

During this period, property businesses acted with speed and made fast decisions to future-proof their profits.

Challenges of refinancing in a complex market

The biggest challenge that we faced in this period was the fact that banks were pulling out of the market left right and centre, which was causing huge panic across this market.  This all then led to the banks that were still lending receiving years' worth of applications to deal with in the space of 6 weeks. At this point in the market, banks were very loyal to their existing relationships with advisers which is why it is so important as a property business to work with the correct advisers.

Achieving Lending Goals

In this particular transaction, there were a few main goals that we had to deliver. The first one was to secure the absolute best pricing possible, the second was to create an element of liquidity and the third was to make sure the structure of the lending allowed the asset to create as much profit as possible. Due to the business's extensive experience in this sector, we were able to deliver the following solution.

The result for the client:

· Value of Assets - £9.800m

· Total Mortgage size - £6.800m

· Total LTV – 70%

· Debt Structure – Two separate loans, one against the residential element of the asset and one loan structured against the commercial element. This allowed us to reduce the pricing across the whole debt structure

· Residential lending - £6,000,000

· Interest rate – 4.5%

· Repayment structure – Interest Only

· Commercial lending - £800,000

· Interest rate – 6.99%

· Repayment structure – 25 year repayment profile

· Total blended rate – 4.79%

P10 Financial Group

If you want to make sure you are receiving the best structured terms available, it is worth contacting the P10 Financial team to see how we can help you. We always aim to add value to our clients by finding a deal, often bespoke, with carefully negotiated terms to suit the client’s interests.