Rental portfolio acquired through company purchase.
Recognise Bank has financed the complex purchase of a portfolio of mixed buy-to-let properties with a £1.16 million Professional Buy-to-Let (PBTL) loan, after the borrower had been let down by a number of other lenders.
The properties on a housing development in Worksop, Nottinghamshire, were owned by a limited company. Rather than buying the properties directly, Recognise supported the borrower in acquiring the company, and thus ownership of the rental portfolio.
Broker Simon Allen of Searchlight Finance brought the case to the Bank after being frustrated at the struggle to find a suitable lender. Even though the borrower, Kevin McDonnell, is well-known in the UK property industry for structuring similar creative deals, Simon found that many lenders still would not look at the deal because of its complexity.
Simon worked closely with Ian Fields, Relationship Manager at Recognise Bank, who helped shape the deal, a fixed rate loan using the PBTL product, which is specifically designed for property investors and landlords with multi-property portfolios.
In the transaction, the existing company directors and shareholders exited the limited entity and the Bank’s clients stepped into their positions. The process involved several sets of solicitors and a higher level of due diligence compared with a standard PBTL deal.
Ian Fields, Relationship Manager at Recognise Bank, commented: “Many of our competitors would not know how to undertake this type of purchase because it is so complex.
“However, at Recognise Bank, our business development managers and loan management teams are some of the most experienced property lenders in the industry and we understood the challenge, what would be required, the steps we needed to take to ensure we could progress the deal, and which professional partners we needed to work with to ensure the deal could be completed.”
Simon Allen of Searchlight Finance added: “Large loans are our bread and butter, and whilst it was a complex deal for some, we knew the transaction could be done due to our experience dealing with property investors. Recognise were a joy to deal with and were positive all the way through the process.”
Recognise Bank was created to provide SMEs with a digital bank offering a range of unregulated lending options via a network of relationship managers based in hubs around the UK. The Bank also offers personal savings accounts and business savings accounts.