We were approached by a new client in July 2015, after his debt was sold on to Cerberus from Clydesdale Bank. The client was aware from other borrowers of Cerberus’ reputation and fact they would shortly be demanding full settlement of this lending facility. He was therefore uncomfortable having his loan with them, and was seeking fast and constructive input to restructure and refinance.
The client, like many who work with Conduit Finance, is an entrepreneur who runs his own business and has a property portfolio to compliment his trading business. While technically complex to deliver, his request and mandate to us was simple; to have access to the whole of the market via one trusted contact with ease and speed of process.
The key components of the deal were; moving properties from a Limited Company of which the client was the sole director and shareholder, repaying the entire debt in one drawdown in order to avoid any enforcement action by Cerberus, no additional cash input from the client, and a new to market, flexible lender who the client could carry out further business with post restructure.
In order to save time and ensure complete clarity on the scope and process, we had two separate face-to-face meetings early in the process to gather all of the relevant information we knew all lenders would be looking for. We took a few days to find the three best options on the market and presented these to the client, outlining with complete transparency the benefits and pitfalls of each.
The criteria for each funder can be defined as follows:
Option 1 - lowest pricing.
Option 2 - speed of completion.
Option 3 - a new and reliable funding partner best suited for his future borrowing requirements.
Having considered our proposal, the client selected his preference and we continued in earnest with the underwriting process. Due to a lower than expected valuation on one of the assets, additional funds were required. This was not an option for the client as cash-flow was at that time tight. On review of our options and taking stock of the assets and the borrowers’ emotional engagement and future plans, we were able to combine the new debt with fast sale of a plot of land to repay Cerberus.
In order to move the properties at their full value out of the Limited Company and into the client’s personal name, we worked side-by-side with his accountant to structure this properly to avoid the client having to liquidate any further assets.
The client was excellent to work with and committed to the process. He was extremely busy throughout the transactions, so we were able to streamline the process for him as much as possible, and at the same time identifying funders able to support his plans for the future.
Conduit Finance’s technical acumen, deep knowledge of the market and direct access to specialist funders allowed us to add value to the client’s business and ensure the client is able to continue trading, grow his business and look forward to the future. Post completion of this deal we have had 2 new individuals referred to us by the client.