Refinancing a commercial asset for an experienced investor

Loan Amount:
£1,350,000

Property Value:
£1,920,000

LTV:
70%

Some borrowers require additional due diligence from our underwriters, especially when their case isn’t a standard purchase. A client turned to us to help them refinance and clear an existing facility against a commercial property.

The borrower had a complex background, but our underwriter carried out the required due diligence to thoroughly assess the situation, and keep the deal moving. Commercial investments can be complicated but in this case, the underlying asset was strong.

To make sure this deal held long-term potential, our underwriter worked closely with the valuer involved, and made sure a solid exit strategy was available.

The benefits of a strong commercial tenant

Our refinancing funding was to be used for a commercial property, which had a well-known company as a tenant. Whilst this made us comfortable with the potential revenue, for added security, our underwriter received a copy of the original lease.

This confirmed that rent from the tenant would be stable, and there were clear terms in place for rent reviews. Meanwhile, the valuer confirmed the property offered desirability to the owner occupier, or investment side of the market. This would create demand for the premises down the line.

Also, the borrower evidenced that plans were in place to get their refinance exit strategy underway. With these assurances, and the borrower’s vast experience in the market, we were happy to deliver funding.

Commercial property may be worth a second look

Investing in commercial property in the current market may be tricky, with flexible working still prevalent across the UK. But, it’s possible to generate healthy yields in certain sectors, such as the leisure, industrial, and retail fields.

What’s more, there are many strategies available to commercial investors. On top of acquisitions and refinancing plans, borrowers can also engage with renovations, conversions, or releasing capital from assets to fund other ventures.

At MFS, we have many products to suit a range of investment strategies, and complex borrower circumstances. This can include corporate setups, trusts, and more. Regardless of whether you’re looking at a residential purchase, commercial expansion, or refurbishment plan, we may be able to help.