We were approached by the founder of a FinTech Company. With the help of investment from the Private Equity sector, her business had started to make steady progress – both in terms of turnover and market awareness.
Real Estate Lending
At SG Kleinwort Hambros, knowledge forms the foundation of everything we do. It is an approach that starts by taking the time to understand your situation and identify your financing or liquidity needs. We pride ourselves on offering a personalised service and have the resources and expertise to offer flexible lending solutions, including mortgages for clients with complex income structures or who are looking to borrow against foreign assets.
Mortgage financing to a start-up entrepreneur
The scenario
With previous start up success behind her and signs of a positive future ahead, the entrepreneur considered this to be the right time to upsize from a £3 million property to a £7 million family home. Her desired property was in high demand and time was of the essence to secure it. However, as with lots of entrepreneurs and business owners, the client’s income was not always uniform or mandated.
It became apparent that that our client would need to complete the purchase before selling her current property and therefore an open bridge* was required.
The solution
The entrepreneur needed to access financing promptly in order to secure this property. We therefore met with the client’s Chief Financial Officer, accountant, and solicitor within 24 hours in order to consider credible income and repayment options.
Our analysis included both the client’s personal and business assets and income, to develop income and repayment strategies to cover both a short-term open bridge and longer-term mortgage finance.
The open bridge was provided over an 18-month term, which provided enough time for the client’s existing property to be sold. The interest rate was variable, using the SG Kleinwort Hambros Base rate. No early repayment fees were applied.
The longer-term mortgage was provided over 7 years, which accommodated for the sale of the FinTech company. The amount was split part variable interest rate and part fixed rate, providing both flexibility and security, in terms of repayment options and movements in interest rates.
Execution of the transaction was such that the client was able to move in within 6 weeks of receiving our offer letter.
*An open Bridging Loan is a type of property finance that is available to borrowers who are seeking to purchase a new property before exchanging contracts to sell an existing property. They are useful when you have equity tied up in a property but you are uncertain when the property will be sold.
Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.
Please consider:
Property is a high-risk, long-term investment, so it may not be suitable for everyone
We recommend you take independent tax advice on any investment or leverage. It’s important to appreciate the specific risks associated with investment leverage before making any investment decisions
Your home may be repossessed if you don’t keep up repayments on your home mortgage
If you borrow to buy an investment property and fail to keep up with the required payments, the property may be repossessed, or a receiver of rents appointed