Supporting a Property Developer with a Speedy Turnaround
The client, a property development and renovation company, approached Magna Money adviser Salman Rana looking for £350,000 as a matter of urgency. The business had a handful of property projects in the works in Harrogate, North Yorkshire, but cash flow had been low in their business, and they had contractors that needed to be paid.
Unfortunately, the aforementioned cashflow problems resulted in the business being unable to get an unsecured business loan offer for the amount they needed, which meant Salman has to begin exploring secured lending options. Fortunately, the business owners, a married couple, had their own residential property estimated to be valued at over 1.2 million with an outstanding 1st charge balance of £220,000 which could be used as security.
Salman began contacting various Bridging lenders to try and find the best 2nd charge bridge deal in an increasingly turbulent market, particularly amid rumours of further changes to the Bank of England base rates. Out of all he spoke to, Together Money were the most efficient, sending him a good proposition and indictive terms that looked like they would make for a good facility in a timely manner.
After consulting with the business owners, they decided to proceed with the Together offer, drawing down a net loan of £352,548 coming in at just under 1% a month with retained interest for the 12 months duration. Th retained interest was exactly what they were looking for, as it gave them enough time to complete the projects and raise cash through either sale or refinance so they could pay back the Together bridge without having to make regular payments while their cashflow was tight.
This case is a great example of why using a broke can be so beneficial for business owners and property professionals looking to raise capital. In one part, market knowledge and lender access can be critical in securing a favourable deal, but also the time saving aspect of not having to do all the leg work as the borrower allows you to focus on your day to day. Had it not been for Salman, the business owners likely would have spent a lot of time exploring unsecured options before realising it wasn’t a fit for them, only to then need to move onto looking at secured lending, a process which can be lengthy when you don’t have knowledge of the right approach, burning through much needed cash all the while.
