An experienced builder wanted to purchase a piece of land, for which he would obtain planning to build two houses on. He required 50% land cost and 100% of development costs. The builder had paid an option on the land, which enabled him to proceed with his planning application prior to completion. Portman provided 50% of purchase costs and 100% build costs, which were drawn against QS certificates. Repayment came from the sale of the properties.
Having been turned down by ‘main stream’ lenders, we were approached to assist a borrower with buying an established business. Although the borrower had an existing business himself, his accounts were weak and he had no personal assets.
The business he was buying came with a property, that consisted of a mix of a shop and flats above but the LTV was 70%. The borrower wanted to a short term loan to enable him to secure the business and he would then try to refinance.
It was clear that to offer what the borrower was looking for wouldn’t work, instead Portman structured a loan that would enable the borrower to establish a credit history, reduce the debt so that the LTV was 60% and to gain two years of healthy accounts. Portman offered a two year loan with weekly capital reductions, which worked well with the business cash flow. By doing this enabled the borrower to become more attractive to the ‘main stream’ lenders.
Portman Finance was approached to assist with a rather speculative purchase. The prospective borrower wanted to purchase a commercial property that he would then obtain planning permission to convert into flats. Although a planning application had been submitted nothing had been granted but completion on the purchase was imminent. Other lenders would not lend without the planning in place, but Portman took a view on the property and its’ location, the experience of the borrower and the financial contribution that the borrower would be making.
Planning was achieved and Portman was repaid from a refinance.
Development Loan with Wrinkles
This was an interesting situation. We were asked to assist with a development of a property with someone who had no prior development experience and a building with appropriate planning but for only two thirds of the building. Portman took a view that given the property type and it’s location planning would be granted for the balance of the building. Planning was granted but after the Portman’s loan was drawn and works had commenced.
Lending to a SIPP
Portman Finance both understands and is comfortable in lending to SIPPs. We recently provided a loan to a SIPP to enable the purchase of a commercial property, but this came with a couple of twists. The property was a freehold with a shop below and flats above, sold off on long leases. Under SIPP rules the residential element is not allowed. So the freehold property was purchased by the individuals and contemporaneously a long leasehold was carved out for the shop and sold to the SIPP. Portman Finance provided the loan to the SIPP to purchase the leasehold of the shop.