Business Loan For Pharmacy

The Solution

After a comprehensive analysis of their property portfolio and existing debt, we proposed a strategic restructuring of their commercial mortgage finance:

• Consolidate all existing debt into a single commercial mortgage, secured against the London property, which had the highest value.
• Release equity from the London property to purchase the Bristol office outright.
• And also clear their existing charge on the Birmingham office.

This approach would result in:

• Two unencumbered assets (Birmingham and Bristol offices)
• A single commercial mortgage secured against the London property
• A lower overall loan-to-value ratio thanks to the high value of the London property, making them eligible for lower interest rates

The final terms were:

• Total loan amount: £2 million
• Term: 15 years
• Type: Owner-occupied commercial mortgage (as the company operates from the property). Note: owner-occupied commercial mortgages generally have more lenient loan-to-value requirements than standard commercial mortgages.

We also knew our client’s requirement was attractive to lenders, thanks to the large loan size and relatively low loan-to-value, so we were able to pitch the best offers from each lender against each other.

The entire refinancing marked close to a 2.5% reduction in the interest rate they’d be paying on their debts over the 15-year term; a saving that itself would cover the entire monetary cost of purchasing the Bristol office.

By taking a holistic view of our client's property finance needs, rather than simply fulfilling their initial request, we were able to deliver a solution that not only met their immediate needs but also:

• Simplified their debt structure
• Reduced their overall interest payments
• Freed up capital for future investments
• Strengthened their balance sheet with two unencumbered properties

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The Solution

This approach would allow them to release up to 90% of their sales ledger value, providing far more than the £200k they initially requested.

To ensure we secured the best possible terms:

• We approached multiple lenders.
• Within the same day, we received term sheets from 9 high street lenders, providing a range of competitive options.
• We compared these offers considering factors such as advance rates, fees, and flexibility.
• We then presented and discussed these options with our client, helping them understand the pros and cons of each offer.

Based on our recommendations and the client's preferences, we secured an excellent invoice finance facility:

• Credit limit: £1 million
• Initial funds released: £800k on day one
• Competitive pricing: 2% over base rate, reflecting invoice finance as one of the most cost-effective funding solutions

The funds were earmarked for various aspects of the haulage firm's operations, including:

• Fuel costs
• Vehicle maintenance and repairs
• Driver wages and training
• Insurance premiums
• Upgrading fleet management software
• Expansion of warehouse facilities

This case study highlights the importance of expert financial advice in identifying the most suitable funding solutions.

Our client was able to unlock significant working capital, supporting their current operations and laying the groundwork for future growth in the haulage industry.

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