Short Leasehold Business Case Studies
Mr. and Mrs. Donnelly were experienced publicans who had always wanted to buy The Angel Public House in Liverpool which they had run for five years as managers. When the landlord offered them the chance to purchase the pub for £135,000 on a 10 year lease they jumped at the opportunity. They had savings of £80,000 and approached their High Street Bank for the balance but were turned down due to changes in lending policy.
After a satisfactory business investigation report indicated that The Angel was a professionally run sound business, a loan of £65,000 was arranged, secured only on the lease. The clients were then able to complete the purchase in just a few weeks using a solicitor with experience in leasehold transactions.
The manager and head chef working at an Indian Restaurant in Manchester wanted to buy their own restaurant in a nearby town which was for sale at £120,000. Between them they had £20,000 in cash and one of them offered a second charge on his house with £70,000 equity as collateral security. The business report valued the restaurant at £110,000 with a good provable profit. The clients agreed this price with the vendor and a 100% loan of £110,000 was arranged. The deal was successfully completed and the clients now operate their own restaurant.
A Kebab Takeaway owner and his family wanted to discharge a shop fitter’s bill of £56,000 together with an outstanding VAT debt of £12,000 by raising monies on their successful fast food business in Yorkshire. The quoted takings were £7,000 per week and the shop was run by family members, so outgoings were very low. Despite a long track record with their High Street bank they could not secure the loan from this source. The clients sought the help of a leasehold specialist and after a business investigation report confirmed their business was profitable, a loan of £85,000 was provided to clear the debts and allow some working capital. The loan was secured by a charge on the lease plus a second charge over their house valued at £400,000 with an outstanding mortgage of £280,000.
BUYING A SECOND BUSINESS
Mr. and Mrs. Patel owned and ran a profitable Post Office Stores in London and had found a second grocery store which they wished to buy whilst continuing to operate their existing shop. Their current business was said to be worth £280,000 and carried a considerable sub-postmaster’s salary. The purchase price of the new store was £350,000 and the business investigation report confirmed this to be an accurate price. The Patels had a deposit of £100,000 and equity in their main residence of £150,000. They were advanced £250,000 payable over ten years with reduced payments for the first 24 months of the loan.
BUYING OUT A PARTNER
The Ambrose brothers owned a busy Supermarket in Chelmsford, Essex which they estimated to be worth £300,000. Peter Ambrose wanted to buy out his brother Nigel for an agreed sum of £150,000 because Nigel wanted to acquire his own shop in nearby Romford. Peter had £50,000 in savings and after a business investigation report was able to borrow the remaining £100,000 secured on the lease of his supermarket.
If you are looking to buy or refinance your business lease
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