As part of our series of regular case study updates, read about a loan we have recently completed that is secured against a multi-purpose commercial property in Greater London. Here, the borrowing entity was owned by a trust in Hong Kong.
Deal scenario
The client sought total borrowing of £3.1 million to refinance an existing loan and provide additional equity to help fund a series of new development projects.
The borrowing entity is a UK-based company with an extensive property portfolio, including some assets outside the UK. There was added complexity in that the entity is ultimately 100% owned by a trust based in Hong Kong.
The client wanted the option to repay the loan without penalty as early as possible rather than locking in for a longer period.
Our lending solution
At Ortus we frequently lend to foreign nationals and international property investors, so we were comfortable with the borrowing structure involved in this deal.
We agreed to a stabilisation loan over 24 months with interest rolled up for the initial three months to provide the client with working capital.
Complications with the lease and usage class of the property necessitated using a planning indemnity policy.
To help facilitate the client’s exit strategy, there are no exit or early repayment charges on this loan. The client’s preferred exit will be from trading business proceeds, but the property also represents a reasonable refinancing option for a mainstream commercial lender based on the income profile.
Outcome
Ortus Commercial Director, Jamie Russell, said:
“Our products are about giving property investors time to realise a business plan. This two-year loan allowed our client to release some equity for a further investment, but also gave a two-year horizon to deliver on another project that would form our repayment.
“As is often the case, complexities arose with an offshore borrowing structure and planning indemnities, but I’m delighted that we were able to deliver this facility for our client.”
Get in touch
If you’d like to talk to us about our commercial lending proposition and how we can help you and your clients, speak to the Relationship Director in your local office.
Beyond Bridges: The next step for borrowers and investors
“This expansion in Ortus’ product range is part of our ongoing effort to serve our loyal clients and introducers. We have had a particular focus on commercial property since our inception and providing 5-year commercial loans was the next logical step in growing our offering. This product now enables us to help borrowers and investors for the next step beyond a bridging or acquisition loan.”
