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Poorly performing trading Ltd Co requires funding to complete barn conversion

Poorly performing trading Ltd Co requires funding to complete barn conversion

We were approached by a broker whose client – a landlord and publican was looking for finance to complete a conversion project.

In January 2016, the client had purchased a public house with a large garden and attached barn. He had planned to renovate the pub, turning the upstairs floors into rental accommodation and convert the barn into a three-bed house.

A year on, the client had completed the renovation works on the pub and started the barn conversion, unfortunately funds were now running low.

The client wanted short-term finance for 12 months to cover the costs. He had also requested no exit fees, as he hoped to complete the build in a shorter timescale.

One issue for the client was that his trading limited company accounts showed significant losses over the last three years, which would deter most lenders.

Keystone, however took a view on the losses and happy with the client’s personal credit score and experience in similar projects deemed him a good risk.

The following terms were offered.

Property value: £600,000

Loan amount: £250,000

LTV: 42%

Rate: 0.85% pcm

Term: 12 months

Product: Short Term Finance Range

Borrower: Trading limited company

Monthly payment: £2,175

Estimated rental income: £2,500 pcm (when complete) 

Lender facility fee: 2% (£5,000)

Broker proc fee: 0.50% (£1,250)



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