Round-Up: March 2023’s Top Picks

Commercial Round-up March 2023

The commercial team had a busy month – and that means some good results for our clients! A few particularly exciting deals have been struck, with more to come on our case studies section. Some include:

Commercial Loan | £1,300,000

A long-standing valued client of Cornerstone Finance sought our assistance in refinancing a number of Bridging Loans that had been taken out to fund various developments and projects.
Some of the developed assets had only traded for a relatively short period or had yet to be completed due to the impact of COVID, and as such did not have an established track record.

We initially reviewed an asset for which we had previously raised a CBILs of £1.7m in 2021, and despite the COVID impact on the hospitality sector, the assets performance post lockdown was exceptionally good. Against this, and with initial management accounts for the new assets showing a strong initial and projected performance, plans were prepared to support the provision of an additional £1.3m.

Re-engagement with Cynergy Bank and the local Relationship Manager and Regional Director saw them supportive of the proposed package, and the £1.3m additional facility was agreed as proposed.
Drawdown allowed all the short-term bridging loans to be refinanced onto long-term debt, providing the client certainty of funding.

Commercial Loan| £300,000

The client approached us seeking funding to enable him to conclude a Management Buy In to an established firm of solicitors, thus enabling the current proprietor to hand over the reins but stay on as a consultant for a period to allow a smooth transition.

The challenge was that whilst the purchaser was a well-regarded Solicitor in their own right, they had no experience of running their own business and had limited capital towards the transaction.
By engaging with the client’s accountant and against the backcloth of strong financial performance on both a current and historic basis, a full Business Plan was prepared, covering all aspects of the business, both Financial and Non- Financial now and going forward. This included its Strengths / Weaknesses / Opportunities and Threats.

Alongside this, early engagement with Ruby Harcombe at the Development Bank of Wales saw them supportive of the transaction, ensuring the retention of a long-established firm in an area where there was a low level of legal representation.

An agreement was obtained for a £300,000 unsecured Loan over 7 years to support the sale of the business for an undisclosed sum.

Commercial Mortgage & VAT Loan | £283,500

The client was introduced to us by their accountant to assist with the purchase of new premises to trade, which will be held within a holding company.

The property consisted of two units, one of which had a sitting tenant, with the other to be occupied by the client. As VAT was payable on the purchase, they also required assistance to cover this prior to being reclaimed.

We were able to source funding at 70% LTV with Lloyds Bank to cover the purchase of the property as well as 100% of the VAT liability.

Commercial Mortgage | £225,000

The client was looking to refinance their commercial property to pay off one of the three owners.
75% LTV obtained at 6.09% – partner paid off and additional funds were raised.

Commercial Term Loan | £215,500

We secured a bridging loan for the client in 03/22 to purchase his trading premises and refurbish them. He used the funds to refurbish and split it into multiple units so it could also be let out. Then needed to repay the bridging loan, so required a commercial mortgage.

Commercial mortgage secured with Allica Bank at 8.5% over a 20-year term on an interest-only basis. Client now has a new trading premises, which also produces rental income.

Unsecured Business Loan | £100,000

An existing client approached us for funding to assist with the purchase of stock, shipping, and the final payment of a new machine they had purchased. The funding was required within a short time frame on an unsecured basis.

Using our links with Funding Circle, we were able to obtain a full credit sanction, secured by a Personal Guarantee only within 24 hours, with the funds available for drawdown within 3 working days. We were also able to refer the client to a partner who can assist with putting Personal Guarantee Insurance in place.

Bridging loan | £50,000

The client was looking to raise £50,000 to carry out refurbishments across their portfolio to increase the value.

£50,000 was raised on a second charge basis, secured against their main 12-month term, which will be repaid by the sale of one of the improved properties.