Commercial mortgages

A better move
When Jon and Kate Atkinson needed larger business premises for their successful media agency, they decided that they would rather own their own premises than to spend money on a lease.

After many months searching they found the ideal premises for their business on the market for £400,000. Their plan was to obtain an 80% commercial mortgage and pay the remainder from reseves. However, they came to us as they were having doubts about tying up their working capital as the 20% deposit.

The Atkinson's had equity in their residential home which they were prepared to offer as additional security. OSL arranged a 100% commercial mortgage secured against both the business premises and their home.

Development Finance

Spotting an opportunity
Kevin McDonald's home had a very large garden which had been long out-grown by his family (and his interest in gardening). Located in a desirable residential area with good schools, Kevin calculated that he could build and sell two detached houses.

Having legally separated the house form the land by splitting the deeds, Kevin obtained planning permission and came to us for advice on development finance for the project.

OSL arranged 100% residential development finance to build the houses, which were subsequently sold realising substantial profit for Kevin and a more manageable sized garden!

Ready to take on the big one!
OSL was recommended to this up-and-coming residential property developer as the advisers to talk to about large-scale development plans. The company needed specialist advice and precision funding for a new housing development spanning 132 units.

Our first concern was to determine whether or not the client could successfully take on a project of this scale. They had previously undertaken developments of a similar type of site incorporating 80 units and after careful consideration we decided that we would be able to assist them in securing residential development finance to enable them to make this 'step-up' to a much bigger project.

We then started to put the pieces together and approached the bank we considered to be the best fit for the client and the project with our proposal. The initial meeting was held on-site and the bank was impressed with what they heard and the preparations OSL and the client had put together. A deal was duly agreed and with the paperwork completed, work on the £26.4m, 132-unit site could begin.

Keeping all their options open
A new warehousing development with a Gross Development Value (GDV) of £11m gave OSL the opportunity to advise on the property development finance needs for a project which we recognised as a winner from the off.

Our client had acquired land very close to a principal motorway, a prime site in terms of distribution. However, our clients didn't just want to develop the site and move on, they saw the longer term potential in the venture as an investment opportunity for the company.

The client wanted us to secure commercial property development finance for the site and then keep hold of it as an investment until the company could realise a maximum return. However, the bank were not prepared to convert the loan to investment finance once the development period had expired and we looked at other options.

OSL approached a building society with a different proposition. The site development was scheduled to take between nine and twelve months to complete and by negotiating an offer letter for a development loan with an 18 month expiry date, this effectively gave the client the breathing space to watch for market opportunities and develop the land to maximise its investment potential.

The OSL proposal kept the clients options open and effectively gave him a commercial development and investment at the same time.

Close, but not close enough
Our client, a leading UK commercial developer of a city centre apartment block was left struggling after his senior debt lender would only go so far with the funds they required to secure the completion of the development.

The development of 180 new apartments in a prime location had a Gross Development Value (GDV) of £15.5m. The client's bank was prepared to lend £10.8m leaving the developer short of his 85% financing target and the project in limbo.

OSL arranged mezzanine finance to bridge the £2.3m gap to take the full package to 85% on the development. We also put in place arrangements to gradually reduce the mezzanine loan from the proceeds of the sale of the first phase apartments.

Winner takes all
Our client, Rob Graham of R. Graham Properties Ltd, needed a quick bridging loan arranged in order to act fast to purchase a derelict property for site redevelopment.

Two other developers also wanted the site, it would just come down to whoever could complete first. Graham's couldn't obtain investment finance as the property was subject to retention and completion would take too long. OSL arranged a bridging loan within 24hrs and Rob was able to do the deal ahead of his competitors.

A better deal
Hewson Transport, a successful freight operator, manage a fleet of 90 lorries, including 18 HGV's that were reaching the end of an existing finance contract.

Hewson's bankers had found and offered them a new commercial arrangement, but they decided to shop around and asked OSL to find a better deal.

Investment Finance

This case involved an offshore property fund with a mixed portfolio worth in the region of £140m consisting of student letting accommodation, HMO, investment properties, office blocks and warehousing. The commercial element was filled with blue-chip clients generating excellent yields. The offshore fund had existing debt amounting to £80m.

Having spotted opportunities to acquire further properties, the fund approached their bank which was willing to grant additional lending up to a maximum of 70%. This £98m was insufficient to cover the client's plans and they approached OSL for an alternative plan.

Our first thoughts turned to setting up a syndication facility and we made an initial approach to senior corporate bankers. We explained that the client's bank was prepared to lend up to 70% of the existing portfolio and that the client was looking for more.

As a result of these approaches, a new bank offered an 80% facility of £112m of which £2m was set aside for charges on the existing and new facility, legal work and surveys. This left our client with £110m, £12m more than their existing bank had offered with amortisation for 12 months. The new bank was also happy having acquired the fund's offshore clearing facility as part of the deal.

Small changes reap big rewards
Northern Holdings (Offshore) Ltd are successful property developers with a mixed property portfolio consisting of large office premises, two light industrial units and eight further commercial buy-to-let properties, all of which yield good rental income. The company came to us to look at ways of restructuring their finances to raise additional capital for new projects.

The portfolio had been built up over a long time financed by an individual commercial mortgage on each property. We negotiated a portfolio loan at a much better rate than the individual commercial mortgages which released further capital. The portfolio had a market value of £2.3m and debt of £800,000. We raised an additional £1m, taking the debt to £1.8m. The client invested in further properties and in effect increased the banks' security.

Scrambling to save a company with all its eggs in one basket
A company that had grown rapidly on the basis of a very lucrative contract accounting for 75% of their turnover, found itself in trouble when this customer's business collapsed. Carrying large debts and significantly reduced turnover, the company was on the verge of breaching its bank loan covenants and struggling to pay creditors. There were also large outstanding payments due for PAYE/NI, VAT and tax.

The Directors knew that the situation was getting worse almost by the day and were close to throwing in the towel. Fortunately, they called us first.

OSL identified that the first priority was to set up corporate finance restructuring for the company's loan obligations and were able to negotiate a 12-month payment holiday. We then looked at their purchase creditors and raised capital through the motor fleet and a sale and leaseback scheme to raise further funds from their business premises. This injected new funds into the company, enabling them to pay off some immediate debt, and agree repayment schedules with other creditors without jeopardising their payment terms and relationships with their suppliers.

We split the debtor book between four major companies to leave them less exposed and also helped the Directors negotiate stricter terms on new business.

These arrangements served to take the pressure off of the Directors who could turn their attentions back to the day-to-day business.

We helped the Directors draw up a new business plan and financial forecasts to get them back on track and negotiated a payment schedule with HMRC to repay outstanding amounts with 6 monthly inspections.

Oliver Laver, OSL Finance Group's Managing Director said, "This was a particularly difficult case to work on as the Directors were considering calling in Administrators. Our objective assessment of the situation helped the Directors to see more clearly and a fresh face certainly helped to lift morale. As soon as we started to pull action plans together, the atmosphere changed and it became apparent that this company was 'saveable'. All of this happened at the end of 2007 and I'm pleased to say that the company weathered the storm and turnover is now up by 75%, a great achievement by the whole team."

Looking beyond debt
A long-standing client of OSL, a large manufacturing firm, came to us because they had reached a stalemate with their bank. The bank was becoming very cautious with the amount of debt the company had and was refusing to even consider extending their lending to fuel further growth, even though the business was sound and had a healthy order book.

The Directors felt that the bank was losing confidence in them and were frustrated that their expansion plans kept being pushed aside.

OSL identified that the problem wasn't that the company couldn't manage its debts, but that their senior debt was too large for one bank to be comfortable with and recommend that a structured debt finance arrangement be sought. We gathered together all of the relevant information, including the company's banking history and growth plans and contacted a number of different lenders to see if they would be willing to take on some of the debt.

We were able to engage a lead bank that took the largest chunk of debt and the clearing facility and three other lenders joined the syndicate to support the remaining debt and future funding requirements.

The Directors now have a great facility for the company's debt, an agreed funding line to fuel future growth and don't feel like they are treading on eggshells with their bank anymore.

Big plans call for bold answers
OSL had advised this long-standing client on various matters in the past, helping it grow through acquisition and restructuring its debt through a number of different providers.

The company came to us again when they needed expertise and further capital to become a dominant player in their marketplace ahead of their main rivals. We assessed the company's position and concluded that it was well placed to make this bold move.

The company's shareholders were made aware of the plans and were comfortable with giving up capital in the knowledge that their small percentage would subsequently be valued much higher.

OSL prepared all of the relevant documents and approached a corporate broking team who had masses of experience and a good track record in this sector.

The corporate brokers raised £17.5m for 27% share value giving the company a big enough capital injection to realise their plans.

Our client is now one of the top players in its sector with a huge market share. The shareholders are very happy too as their diluted holdings are now worth 50% more than their original stake in the company.

The right people in the right place at the right time
The CEO of a company with whom we had a long-standing relationship, approached OSL to advise on a management buy out.

We knew the firm concerned very well and although it was experiencing difficulties, the company was highly respected in its sector and still had strong potential. With the right structures and a good capital introduction, we believed this company could really grow.

We helped the management team to present a case to their existing clearing bank to provide additional funding for restructuring the business and from this, the company was able to get back on track and start to realise it's plans.

Profits were increased by 90% in little over two years, an incredible achievement by the management team. The private equity firm involved in the management buy-out was delighted with the progress the company had made in a relatively short time and management and staff re-gained the confidence they rightly deserved.