Car Showroom

Sector

Property Development

Requirement

Refinancing a land deal

Product

Commercial mortgage within a CBILS wrapper

Key Benefit

Obtaining a commercial investment mortgage for a complicated property arrangement

Our client purchased land in a city centre in 2007 and operated a car dealership from it for 12 years. In 2019, after securing planning permission to develop the site to build 28 apartments the client moved its car dealership to another location. A deal to sell the land was agreed early 2020 but as the Covid-19 pandemic took hold the deal collapsed.

The client re-purposed the site for investment and was successful in attracting quality tenants.  However, the switch to investment use meant the client needed to exit the development finance within 6 months and were put on notice of this by their funder.

Product

FUNDING ROUND secured a commercial investment mortgage within the CBILS (Coronavirus Business Interruption Loan Scheme) wrapper for the client. This took some time and was beset with unforeseen issues – the decision took two months to come through due to lender volumes, in the meantime tenants had found other sites and needed to be replaced.  The land valuation came in lower than expected and within 48 hours of the completion deadline one of several tenants required to meet affordability criteria changed their mind and wouldn’t sign the lease required.  Thankfully, the site is in high demand and the client was able to replace them and get a lease signed in the space of a morning.

The deal went to the wire and was completed at 4pm on deadline day of the CBILS scheme, much to everyone’s relief!

Service

Our client was referred to us by a business contact who knew FUNDING ROUND specialised in sourcing commercial finance for more unusual and difficult property arrangements. Julia Wilkinson and the FUNDING ROUND team supported the client in negotiating a longer and staged exit with their current lender, implementing formal leases with tenants to support the required affordability and worked tirelessly with the lender to ensure the deal could meet their guidelines.

Had FUNDING ROUND not been able to complete on this deal, the client’s previous lender would have auctioned the land to recoup their loan and the client would have lost its investment. The client has now been able to re-mortgage and has benefited from no arrangement fees and no interest for 12 months. They are making a good rental return on the land and have even opened a second site for their business on the site.

“We most definitely bit off more than we could chew with this project, but FUNDING ROUND came to our rescue! We worked with Julia Wilkinson who was excellent. She was friendly and approachable but incredibly tenacious, getting stuck into the project and making it happen. We cannot fault her or the team. They got personally involved, taking and making calls late into the evening, they even told us good news on a Friday and bad news on a Monday so as not to ruin the weekend! That is service above and beyond. We have already recommended FUNDING ROUND to other businesses and cannot praise them highly enough. Without them, this deal would most definitely not have happened.”