Portfolio Expansion

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Our client was looking to raise finance on three of their commercial properties to enable them to expand on their portfolio. The client had been self-employed and involved in the restaurant trade for over 10 years.

The three properties that the client wanted to raise money on are all occupied by Indian Restaurants. Two were are let to tenants and the other was owner-occupied as a trading business. The let properties were on 10+ year leases, with strong rental yields, providing excellent security for potential lenders.

The properties were traditional retail properties, in high street locations, which were reasonably desirable and had strong demand.

Finance Terms

All three properties were mortgaged with a high street lender, who were unwilling to offer the client additional borrowing. The client needed more funds to purchase a further investment property, which would increase monthly income.

As well as the client wanting to raise extra money on the properties it also gave them the opportunity to look for a better rate. The client was looking to borrow the money on a capital repayment basis and was keen to keep monthly repayments under £3,000 per month.

The total rental income received from the investment properties was £3,341.67 per month.

  • Loan Amount – £530,000
  • Combined Valuation – £910,000
  • Rate – 2.85% above base rate
  • Monthly Payment – £2,772
  • Repayment Method – Repayment
  • Lender Arrangement Fee – 0.75%


This application presented a challenge as the client was keen to group the properties together under one application. This was tricky as two of the properties were commercial investments, with the other being owner-occupied.

Each of the properties had previously been occupied by the borrower. They had built up the trade in each property, before letting it at a premium rent, based on the strong trade, which was immediately available. This excluded a lot of lenders from the market, as they weren’t comfortable with the mixture of owner-occupied and investment properties on one application.

We were able to secure funding for the applicant on the below terms using a blend of rental income and the net profit of the owner-occupied restaurant.

The loan was funded through a highly-regarded challenger bank at a very low rate, which represented a significant saving for the client.


About The Author

This content was produced by our Commercial Lending Director, Gary Hemming. Gary has over 15 years’ experience in financial services and specialises in bridging loans, commercial mortgages, development finance and business loans. He is widely respected in his field and regularly provides expert commentary for specialist trade publications, specialist business press as well as local and national press.

Gary Hemming CeMAP CeFA CeRGI CSP  -  
Commercial Lending Director

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