June was a record-breaking month for us at Cornerstone Commercial Finance, with over £15 million funding to our clients across 25 different completions. Our team has worked with a wide range of clients this month, from a £65k Bridging Loan (completed in just 4 days), to a £1.7m CBILS facility in the Hospitality Sector.
Commercial Loan | 20 Years | £690,000
A client was looking to refinance two adjacent Semi Commercial properties in Merthyr Tydfil to repay the existing finance split between two funders, then leverage the finance to fund their next project.
The two units consisted of 17 residential flats and a commercial unit. The client also wanted to transfer the properties from their private name to a company name.
The case was fairly complex, with some of the flats only just being finished and the commercial unit closed due to Covid 19. In addition, the client faced planning problems and difficulties with the transfer of the titles into a company name.
By working closely with the solicitors and funders involved, our team was able to help our client overcome these problems and secure a £690,000 commercial loan to fund their project.
Church Development- 900k -Commercial Mortgage
Using their property development company, our client purchased a 19th-century church that lay vacant and unmaintained for a number of years. They worked with the local council to obtain planning permission to convert the property into 20 residential apartments which had a GDV of £1,200,000. The client secured funding for the conversion works (£600k) and progressed with the works. However, during the process, their architect passed away and as a result, the clients had to work with the council’s planning committee to complete the works on a design and build basis.
On completion of the works, the client intended to transfer the property into their property portfolio company. When using a previous broker they were unable to source funding due to the property not having an NHBC Warranty or Architect certificate and as a result, faced losing the property due to the existing funder requiring their funding to be repaid.
The client’s solicitor recommended Cornerstone Finance due to our experience in dealing with out-of-the-norm proposals. An additional issue that arose was the funders requiring that the property be transferred at full market value with cash transferred between the respective SPVs. As the client did not have the funds we took on the challenge of discussing this with the funder and confirmed to them that all taxes were being paid at the full market value from one SPV to the other. We were able to get an indemnity agreed with the underwriter, which determined that the transferring SPV waived their rights to the shortfall of cash (£300k) being transferred in the event that either/or SPV hit liquidation issues in the future.
With regards to the issues of the lack of NHBC Warranty or Architects certificate, we arranged for this to be the first action to be addressed between the solicitors where it was established that due to the property being a conversion as opposed to a new build then an NHBC Warranty was not required. Instead, the funder was able to accept a retrospective certificate to cover the works of the conversion.
As the client’s existing loan from an alternative funder had expired, the funder started to apply pressure for full repayment and had indicated that if they were unable to do so, the property could be repossessed. To help solve this, we liaised with the client, existing funder, new funder, and both sets of solicitors to obtain credit approval for the extension of their funding through to completion and full repayment with the client servicing the interest at a cost of £4k pcm.
By using our extensive knowledge of the market, we acted as both High Street Banking Senior RM and dedicated commercial finance broker to liaise with all parties and overcome the issues that were encountered. The client was extremely satisfied with our service and we were able to achieve their goals of refinancing the property, release funding for their next project, and prevent the church development from being repossessed. We are delighted to also now be involved in assisting with the sourcing and managing the client’s other developments.
Buy-to-Let Mortgage / 20 Years / £438,750
A new client approached us at Cornerstone Commercial Finance wanting to refinance a property they had bought and converted into 2 new flats. The property was set up as a multi-unit freehold, and the client wanted to create 2 long-term leaseholds and remortgage both flats individually, whilst retaining ownership of the freehold.
Having bought the property for only £82,000 back in early 2000’s, the client had each flat revalued at £295,000. They also had capital raised in excess of £440,000 to further invest in property. Between Cornerstone and the team at Landbay, we made a relatively complex transaction straightforward and the clients were delighted with the simplicity of the transaction, the amount raised from the properties and the property valuations returned.
Portfolio Purchase / 20 Years / £420,000
An existing client and experienced landlord contacted us to arrange the purchase of 5 new buy-to-let properties to add to his ever-expanding portfolio.
By using a cross-application approach, the team over at Landbay managed to agree to the applications, complete the valuations and issue mortgage offers on all the cases, all within 4-weeks of applying for the finance.
By working closely with the client’s solicitor, our client was able to purchase all the properties only 7 weeks after applying for finance.
Auction Purchase / 12 Months / £68,845 / Investment
A new client approached us at Cornerstone Commercial Finance after being let down by his previous lender. The client had agreed to purchase a semi-commercial property at auction on the 18th May 2021 and had to complete the purchase by the 30th June 2021 otherwise he was set to lose a deposit in excess of £16,000. This meant that we had to act very quickly.
The lender was instructed to act on day one along with legal representation, in order to get the process moving as fast as possible. The lender met the client the next day to arrange the signing paperwork, and the necessary insurances were arranged by our in-house insurance department, Cornerstone Commercial Insurance. This was all arranged on the same day and great work by his solicitor meant we made the 4-day deadline with half a day to spare.
Bridging Loan / 12 Months / £140,000
Our team at Cornerstone Commercial Finance recently helped a client to obtain a bridging loan to assist with the purchase of a property which was valued at a purchase price of £140,000. The desired property was deemed unmortgageable, so the initial plan was to spend £45,000 on refurbishing the property to get it into a position where the client could sell on the open market and make a decent profit.
Our team approached Shawbrook Bank to obtain the funding and they were able to provide a Light Refurbishment Loan product at 85% Loan to Value. This finance product allowed the client to raise 75% of the purchase price, as well as providing a further 10% for some light refurbishment works.
By working closely with Shawbrook and the client, Cornerstone Commercial Finance was able to provide the client with this finance solution that will enable them to refurbish the property and increase its value. The rate was also achieved at 0.85% over a 12 month fixed period, and importantly with no exit fee, so the client will now be able to sell the property when it’s ready with no further charges