Our client, an engineer, runs a successful engineering consultancy business which provides the income for his lifestyle requirements. With his cousin he also owns a property company that developed/built 14 flats.  Of these the cousin has purchased 7 from the company whilst our client has already purchased 2 which he owns unencumbered. All 14 of the flats have been continually rented since completion 3 years ago – there has never been more than 1 empty at a time, and no flat has been empty for more than a couple of weeks.  There have been no rent arrears.

Our client approached us as he wished to raise finance to purchase 5 flats at full market value; 5 flats @ £110,000 = £550,000. He had cash of £192,500 and so required us to raise £307,500.

The client’s engineering consultancy business declared a net profit of £77,693 from which our client drew dividends of £47,500 leaving shareholder’s funds at £174,141.

With this, a first legal charge on the properties being purchased; valued at £550,000 and the existing rental stream from the two flats he already owned (£13,800pa) and rent from the flats to be purchased (£32,700pa) we were able to raise the finance required at a competitive rate, 25 year term, bank base + 3.15%.