Case Studies
Nightclub refinance in the North West
We provided £250,000 to repay the borrower’s mortgage and brewery loan; to repay outstanding VAT and tax; and to purchase his co-director’s shares. Our security was a first charge on an established nightclub in the North West. The loan term was 15 years on an interest only basis. The borrower was given a one year capital repayment holiday to enable the business to stabilise following earlier problems. The historical accounts of the business showed losses but these were satisfactorily explained and steps had been taken to rectify the problems, as confirmed by the borrower’s accountant and up to date management figures. Our loan also enabled the borrower to negotiate substantially better discounts from the brewery, thus increasing profitability.
Why Hampshire Trust?
Unusual security type; the purpose – consolidation of loans, repayment of creditors; and historical accounts showing losses. We listened to the borrower’s explanation and were prepared to lend based on management figures and projections.
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Refinance of car breakers yard in Essex
We provided a loan of £150,000 over a 15 year term to repay a private mortgage of £95,000, with the balance being used to replenish working capital that had been withdrawn from the borrowers company to carry out improvement works to the security property. Our security was a car breakers yard valued at £305,000. The borrower is director of the Ltd company that operates the yard under a formal lease. The company is run on a day to day basis by the borrowers husband, who is a discharged bankrupt. There were historical CCJ’s and we were reliant upon management accounts to demonstrate ability to service.
Why Hampshire Trust?
The purpose of loan and nature of the security were not attractive to mainstream lenders. The borrower’s husband’s operates the trading Co and he is a discharged bankrupt. Historical CCJ’s. Limited accounting information.
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Refinance of recording studios in the Midlands
We provided a loan of £56000 over a 10 year term to redeem the borrower company’s existing mortgage with a clearing bank and to provide additional funds for refurbishment of the security premises. Although the borrower’s mortgage account was in order the bank were being particularly inflexible and insisting on accelerated capital repayments, thus severely restricting the company’s cashflow. The accounts for the borrower company were not strong and the security was unusual, but the payment record with the bank was excellent over many years which in our view was sufficient to compensate for the unusual security and weak accounts. We were therefore prepared to take a view on the negative aspects and agreed to proceed.
Why Hampshire Trust?
The lack of flexibility from the customer’s bank caused dissatisfaction and there was a need to release capital and ease cashflow pressures. The security was unusual. The formal accounting information was weak. The borrower company’s directors had some adverse credit (in the form of CCJ’s).
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Pub purchase in Shropshire
We provided a loan of £124,000 over 15 years to assist with the purchase of public house costing £225,000. The borrowers provided the balance from their own resources. The pub valued at £180,000 on an ERRP basis, giving a loan to value of 69%. The borrowers have no experience of running a pub but impressed at interview and had produced a good business plan. The vendors accounts were reasonable and we also obtained a business appraisal/valuation report.
Why Hampshire Trust?
The borrowers had no experience of running a pub. The vendors had allowed trade at the pub to drop off considerably and had alienated themselves with the locals and thus an element of re-establishment was necessary. On the plus side the borrowers had a good cash stake, the right personalities and a well thought out business plan, which together with the business appraisal report were sufficient to persuade us to support them.
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