Categories: Case study | commercial mortgages

The client in this case had faced a number of financial challenges over the years, with bankruptcy amongst them. They had exited an Individual Voluntary Arrangement (IVA) within the last twelve months and needed help to see if they could secure a commercial mortgage to buy a business premises.

Our job was to find a lender set-up to work with clients who have had adverse credit, so we could help this person get back on their feet.

The case

  • Investment route: Limited company commercial investment
  • Loan needed: £227,000
  • Property value: £430,000

How we helped the client

There were two central challenges with this case. Firstly, the client had significant historic and recent adverse credit. Secondly, the client was a first time landlord.

In the past, the client struggled financially and declared bankruptcy. This was some years ago, but a recent consequence of this was an Individual Voluntary Arrangement (IVA). The client had managed to exit the IVA, but only within the last twelve months. 

When it comes to borrowing money, any previous inability to keep up with debt payments is a factor. Some lenders are not set up to help clients in this situation, because there are risks involved, whereas others have flexible criteria with the specific aim of working with clients like this.

Factoring in the client’s lack of property investment experience made the scenario a complex one to solve.

The client wanted to use their much improved financial circumstances to invest in property. They were interested in the potential for high yields from commercial property.

Due to the increased complexity of commercial property and the greater risk attached as a result, it is less common for lenders to take on applicants who are diving straight into commercial property without previous experience in the private rental sector.

Our advisor was able to quickly narrow down the lender search to those more flexible on adverse credit, and the fact that the client had taken positive steps to turn their difficult situation around was seen favourably. Happily, the lender was willing to help the client even though they were a first time landlord.

This was a great result, and we hope it proves to be transformative for the client, both now and in their future endeavours.

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