Unique Property Finance

It’s not unusual for your reputation will proceed you every time you approach a lender. This often works in your favour, especially when it comes to working with creditors you have borrowed from before or showcasing your track record developing real estate. However, there will be times when your reputation can work against you, in particular when a lender perceives that you bring an element of reputational risk to the deal.

It’s important to note that perceived reputational risk and actual risk are, of course, very different things. Lenders also know this, but they often err on the side of caution when it comes to a borrower that could create reputational risk. Every lender will consider their reputation when they lend, but larger lenders with more stakeholders tend to be significantly more cautious than other players. Most mainstream banks and

institutions won’t lend if they think there is even the slightest potential for reputational risk, even when they know the deal is very secure from every other angle and irrespective of how strong your finances are.

The challenge with perceived reputational risk is that it is measured differently by each lender – there is often no way to know how they will judge you or by which parameters they will make an assessment. It is highly frustrating, especially if lenders are influenced by scenarios or circumstances that are wholly outside your control – litigation you are affected by but not directly involved in as a claimant or defendant, for example.

If you face a scenario where lenders think you bring a reputational risk to the project, securing financing will usually be a case of who you know, not what you know. Some lenders will work with you even if the wider market perceives to bring potential risk to a deal, but they are specialist and niche, and they don’t publicise any kind of openness to do so. Finding these players is challenging if you are operating alone, and often, introductions from a party like Enness who know who these firms are will be required to connect with them in the first place.

You will need to have a strong case and provide factual context into why you don’t pose so much reputational risk that borrowing needs to be off the table. Expect lenders to assess you very carefully, and their questions will be forthright. Answering them in kind and with confidence is imperative. Enness’ brokers will be able to help you do so, and they will also help lenders understand the wider context of your situation and present your application in the best possible light.

Enness will help you source and negotiate unusual property finance, regardless of which type of asset you wish to buy or develop. The team has significant experience with financing land, purchase of large retail spaces, warehouse developments, leisure and tourism developments and unusual commercial projects, amongst others.

If you want to purchase more exotic or unusual assets using your property as security, Enness will also be able to help you finance such purchases. Property can be used as collateral to buy all sorts of asset, including (but not limited to) art, sports cars, watches and so on.

What you want to buy and your ambitions will affect who Enness approaches for your finance. Whether you wish to borrow significant capital to buy or develop real estate, Enness will be able to source finance for you. With access to all the lenders in the space, your broker will know exactly who will offer the most competitive rates and flexible terms.

What you will pay for this type of finance will depend on how much you want to borrow and the asset(s) in question. If you are financing a more unusual project, in some instances, you will be able to borrow less and may potentially need to put additional security forward to give lenders more comfort.

Lenders weigh risk very carefully when it comes to any kind of property purchase, but when there are restrictive or unusual covenants involved, they will tread even more carefully. It’s worth noting that restrictive or unusual covenants alone are not necessarily an issue for lenders. However, they become a problem if they could affect your property significantly or if they are very limiting for any number of reasons. Often this will translate into a struggle to find a lender who will finance your project.

Not every lender has the appetite or capacity to lend against property with restrictive or unusual covenants. However, some will be happy to lend, provided your plans are feasible and workable with the covenants and won’t negatively impact your real estate.

If the property you want to buy will be affected by restrictive or unusual covenants, how you present your application to lenders is critical. Having sensible plans to tackle the issue head-on is likely to be seen favourably by lenders.

It will be helpful to have a skilled team like Enness work alongside you. Your broker can present your plans, answer lenders questions, and present your application with confidence. As well as sourcing and negotiating finance, your broker will also know what kind of questions lenders will ask, where they will focus their enquiries, and where you will need to give the strongest answers. Always working on your side, Enness will help you source finance quickly and efficiently.