One of my existing clients owns the freehold of a mixed-use property in Soho. It’s comprised of a triplex flat, which is let on an Assured Shorthold Tenancy (AST), situated above an art gallery which he also leases out.
His entire property was worth £3.5 million but he was only planning on re-financing the flat – valued at £2.5 million. Our residential department organised this deal for him and he was very satisfied with the terms.
However, just after the buy to let mortgage had been completed my client received an unexpectedly large tax bill. He owned his business and had plans for growth that required further investment into the business, which his tax bill now coincided with.
As he urgently needed to raise the finance to fund both his tax bill and growth plans he contacted me as a representative of Enness’ bridging team to enquire as to whether he could obtain a bridging loan in order to raise the capital he needed.
Applying for a bridging loan as a response to an unexpected tax bill from HMRC is not an unusual situation for people who are self-employed. I was able to provide him with a timely solution.
I applied to a well-established bridging lender with whom Enness have a good relationship and requested they took one charge against the freehold property and a second charge against the flat, in total raising the client £250,000. My client’s expectations were low as another broker he had spoken to quoted him an interest rate of 1.5% a month.
I approached a lender we have been submitting business to for many years and where we have developed a very trusting relationship with them. When I approached them with the deal we were offered a rate of 1.25%. Purely by coincidence, it turned out this was the same lender the other broker had been quoted 1.5% with, presenting my client with a significant saving by using Enness. I co-ordinated this deal so the term of the loan was 9 months long. It was also agreed he would be able to receive a further advance from the existing first charge mortgage lender after six months to repay the bridging finance. After the substantial valuation reports which took a week, I completed the deal within three weeks which is very quick for such a complex deal. I was also able to supply my client with a term sheet on the same day the enquiry was submitted. This was great for my client as it meant he could present it to HMRC to demonstrate his ability to pay his tax bill. He was very happy with the outcome and the peace of mind Enness’ services offered.