Key Figures:
- Client: UK National and Spanish Resident
- Asset: Penthouse in Dubai
- Property value: £7,500,000
- Loan amount: £1,300,000
- LTV: 25%
- Interest rate: 1% pcm fixed, 12-month term
In this case, a corporate services provider approached us on behalf of a client who urgently needed to raise capital to finance a luxury asset build. The client was due to pay for the asset – which had been commissioned and was a new build – in tranches to coincide with different stages of completion.
The client had already put significant capital forward to start the building process, which was already underway. However, the case was complex as the client had initially (albeit informally) committed to co-owning and financing the asset with a business partner. However, the partner was no longer able to commit to investing in the project, and the client now had to pay the total amount themselves. As a result, they needed to raise more capital than initially envisaged, or they risked being in breach of their contractual obligations, given they had commissioned the build in their own name.
The client, a beneficiary of a trust, needed to pay £1,000,000 within two months, as well as subsequent tranches at different stages of the build, as well as a final balance that was due on completion.
We worked closely with the client’s corporate services provider to review the client’s assets (both those held personally and via the trust) to see how best to raise the finance needed before the deadline.
Given the deadline needed to raise the significant capital required, we suggested an unregulated bridging loan against the corporate entity that owned an unencumbered penthouse in Dubai, allowing the client to raise £1.3 million and make available a significant portion of the required funds available. The lender, a boutique player, was comfortable with the loan being used to finance a luxury asset purchase, which is often complex to arrange. The capital was ultimately structured through a corporate entity of which the client was a beneficial owner through the trust structure.
Enness continues to work closely with the client to arrange the successful financing of the remaining balance of the build and to buy out the bridge loan showing our ability to provide a multitude of solutions to our clients.
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