Saving a business with a second charge loan – Case Study

  • 26/09/2017
  • 0
When all other lending options have been extinguished, one client turned to a specialist broker to help save their business. Matt Tristram, director of Loans Warehouse, explains how he stepped in.

The challenge

The client came to us in straitened circumstances.

They required stock which was supplied to a range of clothing outlets including household names such as TK Maxx. Any funding would only be a short-term fix for two-to-four months, which ruled out term lenders.

The firm’s credit profile wasn’t ideal by their own admission, but without an immediate cash injection to buy more stock, the client would face the possibility of losing more revenue.

They were using an inhabitable property as security, but no conventional lender would agree.

And personal loans would put a strain on cashflow which was already an issue as the business was a main source of personal income.

However, the valuation fee of the very large three-storey seafront property came in higher than the client expected, at around £980,000.


The deal




The solution

We used the applicant’s main residence as security by way of a second charge, which was secured following a meeting between the lender and client.

The deal was completed in nine working days and allowed the client to purchase stock for their business and meet their supply contract.

Ian Broadbent, director at Holme Finance Bridging Solutions explains why they were happy to take on the loan: “The client had been left in an embarrasing set of circumstances which were beyond his own control.

“He was able to provide evidence that he would be in a position to rectify the situation very shortly but had he failed to meet the demands of an upcoming contract with some big high street names, it could potentially have resulted in the demise of his entire business.

“With just a small short-term loan to assist with cash-flow, we enabled the client to continue to earn. While the property was currently not habitable, we were able to evidence a significant value and as such we were able to proceed without the need for a full valuation.”


There are 0 Comment(s)

You may also be interested in


Keep up-to-date with all the breaking bridging and short-term lending news and analysis, from regulatory changes to product innovation and inside market knowledge. Take a look at our broker and lender case studies showing short-term finance in practice.


Find all the news, opinion and analysis for property finance brokers specialising in commercial and semi-commercial mortgages, alternative and development finance for commercial investments in residential projects.

Second charge

Stay up-to-date with the latest news, analysis and opinion on the secured loan market as it evolves into a mainstream finance option following European regulation on 21 March 2016.

Complex buy-to-let

Whether it’s a complicated asset or a complex customer, you’ll find out all the breaking buy-to-let news in this section. From limited companies to portfolio landlords, student lets to a House in Multiple Occupation, we’ve got all bases covered with our up-to-the-minute news, analysis and opinion.

Mortgage Solutions

Find all the breaking news, analysis and industry comment on Specialist Lending Solutions' sister site, Mortgage Solutions

Read previous post:
Together completes £275m securitisation

Specialist lender Together has completed its first public residential mortgage-backed security (RMBS) transaction, issuing £275m.