The Bank was approached to consider a proposal to fund a substantial renovation and improvement project in a town on the edge of London. The security comprised two mixed use buildings which backed onto each other. The first was commercial on the ground floor with flats above and the second was commercial on the ground floor with offices above. The client had obtained planning consent to add additional floors, convert the office space to residential and amend the usage of the commercial space. The completed development will provide 31 residential units with a restaurant and a wine merchant on the ground floor. The client also holds a large investment portfolio of BTL assets in the area.
The client had a facility agreed with a clearing bank to fund the development but at the eleventh hour the clearing bank adjusted the terms and increased the requirement for the client’s assets under management. It was at this point that the broker contacted Gerard Morgan Jackson, Head of Structured Finance at United Trust Bank.
The broker, having known and worked with Gerard for many years, has come to rely on UTB’s Structured Finance division to provide financial solutions where other lenders only see problems. In this instance, the Structured Finance department tailored a three phased facility which met all of the client’s needs.
Phase 1. Refinance Facility – repaid the existing lender secured on the site in under 10 days
Phase 2. Development Facility – provided 100% of the build costs for the project
Phase 3. Investment Facility – a medium term investment loan to refinance the client’s existing lender on their BTL portfolio
For phase 2 the Structured Finance department worked closely with UTB Property Development Director, Paul Keay, to provide the development facility. This was another good example of UTB working across the two departments providing flexible funding solutions. Where there are time constraints, where the asset does not have planning, or where the client is amending the planning, the Structured Finance department quite often provides the initial facility before being refinanced by a UTB development finance facility once the client has achieved his objectives. This typically increases the client’s profit margin as a direct result.
UTB’s Head of Structured Finance, Gerard Morgan Jackson, commented: “The Structured Finance department has been set up specifically to provide bespoke financial solutions for sophisticated investors and developers. Initially the client or introducer outlines the funding proposal and the Structured Finance team then work together creatively to come up with a series of solutions. There follows a face to face meeting with all parties whereby these tailored proposals are discussed around the table. Often terms are agreed at this meeting and then professionals are instructed. UTB’s Structured Finance department offers a highly personal and unique service, acutely focussing on delivering a custom-made funding solution which meets clients’ needs quickly and efficiently.”