Edinburgh Developer

Lending Query

A property developer specializing in refurbishing historic residential buildings in Edinburgh, Scotland, approached Silver Oak Capital seeking assistance in acquiring a new property in the Old Town area. They required a long-term commercial mortgage at 70% loan to value (LTV).

Client Circumstances

The borrower had a successful track record in revitalizing historic properties in Edinburgh. They sought buildings with historical significance that required renovation or were underutilized. With a proven history of successful acquisitions, the borrower provided significant assurance to potential lenders. They aimed to complete the purchase swiftly with
cash but required a readily available loan for post-acquisition use.

Problems to Solve

Key challenges in this case included the relatively high LTV of 70% requested by the
borrower. Additionally, securing a long-term facility (5-7 years) on an interest-only basis posed difficulty due to the short leases held by some of the current tenants. To address this, a solution was needed to mitigate potential rental void periods.

Solution Provided

We presented a tailored solution from a reputable Edinburgh-based lender that aligned with the client’s requirements:

  • Loan Amount: £5 million GBP
  • Loan to Value: 70%
  • Interest Rate: 3.75% + Bank Base Rate
  • Term: 5 years
  • Repayment Structure: Full Interest Only
  • Bank Fee: 1.25% This solution not only met the client’s challenging circumstances
    but also addressed the potential risk of rental void periods by incorporating a reserve account mechanism to cover any shortfall in rental income.