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Commercial Investment Nightclub – Case Study

Lender: Assetz Capital

Amount: £230,000

Interest Rate: 8.9%

Experienced commercial investor had been let down by another commercial finance broker who did not fully understand the market for his proposal.

Newsource was brought in by the applicant’s solicitor as time was running out as he needed to refinance the property to raise funds for another purchase. The property is a large commercial unit split into 3 units – one being a nightclub, one had a restaurant tenant moving in and one empty.

Commercial Investment

Having given the new restaurant tenant a rent-free period, to get up and running, we only had one income stream to utilise for this proposal. Compounded by the fact this being a nightclub, the lender market for the leisure industry is specialised and very small. Having discussed the various options including taking into account potential future changes to said property and income, it was agreed to use a term/bridging lender which was competitively priced and flexible.

The problem with a bridge was that the clock starts ticking immediately from draw down and even though 12 months sounds like a long time, the applicant needed time to re-structure the tenants and create wealth to be able to refinance away. As a responsible broker we always think ahead to try ensure a solid exit strategy for our clients.

We quickly researched the market and found that we could use a hybrid product (between a bridge and a term) which was a 5 year term deal with more attractive rates than a bridge. It also gave the applicant more time to get the tenant structure right for potential re-mortgage to a more palatable rate. We quickly got the loan in place which gave the applicant the monies to purchase another property.

More importantly from all this we’ve given the client a commercial lender view point so he has slightly changed his plans with the property to make the next lender move more attractive to the market which in turn will be more competitively priced rates.

The applicant has been delighted with the relationship he has with Newsource to secure funding. To date, we have already helped him fund another two property projects.

To find out how we can help you with a commercial investment call us on 01423 524 559 or complete our contact form.

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