£3m interest only facility for the purchase of a PCL holiday home
The situation?
I was approached by my client, a founder of a company listed on a foreign stock exchange. This UHNW individual was looking to purchase a prime central London pied-a-terre for holidaying and long weekends. The purchase price was £4 million and they were looking for a loan amount of just over £3 million.
A majority of the client’s wealth was in US dollars. At the time of our discussions, there was also economic volatility that could cause the GB pound to weaken in exchange, therefore costing the client more in the long term. Not wanting to lose money, I was asked to find a facility that could be paid in the same currency to preserve funds for as long as possible.
The complexity with sourcing this client’s facility was they weren’t able to demonstrate proof of income. The client was not actively receiving a salary, took dividends as and when, and were reinvesting capital back into the business for optimal growth.
For this case, I needed to think creatively. Personal financial drawings for the clients were not particularly high, however the business was valued in the multi-millions. In order to demonstrate my client’s wealth, the most suitable solution was to monetize the asset value for loan.
The solution?
The client had a diverse asset base which was difficult to prove to lenders. However, using my long-standing relationships I was able to approach underwriters at various private banks to explain the situation in full. I presented the client’s case comprehensively and was able to work with a private bank to offer a bespoke facility that would tick the boxes of the client.
The final facility was a competitive 5-year variable, interest only loan that meant the client was able to pay in USD, but purchase the prime central London home they had been wanting for a long time.