Case Studies of Recent Projects Successfully Completed
As a Commercial Finance Professional you will be trained and supported to offer a very broad range of financial services to your clients. Listed below are case studies of client projects recently completed by our team. We have also included some ' revenue facts ' to give an indication of the income potential from each product area If you require more specific detail on these or any of the other products and services we transact then please get in touch..
Case Study - Commercial Mortgage - Workshop and Warehouse Units, Doncaster.
Client Requirement : Our client approached us recently for general advice and to secure funding for the acquisition of an Engineering Workshop and Warehouse unit in Doncaster South Yorkshire. The client needed a term mortgage of 70% loan to value on the unit amounting to £390 K , the balance of his own deposit funds were pending the sale of an unencumbered residential investment property in Islington , London which at the time was on the market with no firm offers in place.
Solution : To raise the deposit funds we were able to secure a short term bridging loan of £175K secured on the investment property at 50% of confirmed value at an interest rate of 1.1% per month. This was in place within 2 weeks and in tandem we secured a commercial mortgage offer at 3.5% over Bank Base on a 15 year term with a major lender. The Commercial Mortgage completed in October and the Investment property sold in November.
Rewards - Commission and fee income on the project amounted to £3,500 on the Bridge Facility and £5,850 on the Commercial Mortgage - Total earnings From The Case = £9,350
Brokerplan Revenue Fact - Commercial Mortgage Funding:
One average sized £350,000 Commercial Mortgage transaction successfully completed will generate total fee income of circa £6,000
Trading Business Finance − Retail , Leisure , Manufacturing and Commercial Businesses.
The acquisition of a ‘lifestyle’ trading business is a dream for many clients and with funding generally available up to 70 -75 % of the business valuation you will be in an ideal position to assist the client.
For sitting tenants running a profitable business from Leasehold premises such as a pub, restaurant or fast food outlet with a good trading record it is often possible to secure 100% of the freehold property valuation should they get the opportunity to purchase the freehold of the premises.
Case Study - Property Development and Refurbishment Finance
Providing Property Development and Refurbishment Finance to the SME Community is an extremely lucrative element of the Brokerplan programme. You will learn how to qualify, develop and manage such opportunities with over 30 UK Lenders very much active in this in this part of the market. In addition to the provision of the ' Senior Debt' for such projects you will also be providing the top up finance for the project or so called ‘Mezzanine Funding’ which will add significant additional fees.
Client Requirement - Our client , an experienced property developer operating across Yorkshire and the North East approached us for £580K of funding support to develop the site of an ex public house in a North Yorkshire market town. The property had full planning consent for conversion of the pub in to 6 flats and the new build of a terrace of 7 affordable units in what was previously the pub car park. The client had been let down by his own Bank who had initilly indicated support but failed to deliver a confirmed funding offer after 6 weeks of deliberations.
Solution - Working with a specialist development lender who will support ex-pub type developments we produced an 'In Principle' offer the same day and arranged project valuations and Quantity Surveyor appraisals within 48 hours. Within 8 days with reports to hand the formal offer of funding was delivered to the client and the formal commercial and legal due diligence completed in a further 4 weeks and staged drawdown of funding commenced allowing the build works to proceed.
Rewards - Our fee structure on this project was 1% paid to us by the lender and 1% paid direct by the client - 2% in total equivalent to £11,600 of fee income from the case.
Brokerplan Revenue Fact - Property Development & Refurbishment
One average sized typical £750 K Property Development transaction completed will generate total fee income of circa £15,000
Case Study - Buy To Let ⁄ Investor Mortgage Finance
The Buy To Let Mortgage market is now starting to gain pace again as many Professional Investors and Landlords look to take full advantage of many properties offered for sale at ‘below market value’. With significantly more Buy To Let Mortgage products being available in the 75% - 80% Loan To Value (LTV) range this presents significant opportunities to tap in to this market opportunity. In addition a significant number of landlords are seeking to re-finance an existing portfolio of properties to raise cash for new acquisitions.
Client Requirement -Our client had built up a substantial portfolio of 130 residential and commercial properties across the North of England and had, over time taken out mortgages with a wide variety of buy to let and commercial lenders. The borrowing level across the portfolio stood at sub 50% of the current market value but the disparate and varied nature of the funding structure meant that the client could not leverage the equity in the portfolio to finance other acquistions being presented to him at below market value prices.Ideally the client required a 'fighting fund' of circa £500 K to take to the market for new property acquisitions.
Solution - Not being a straightforward re-finance exercise we presented the case to a specialist property lender offering near to high street rates and we agreed a schedule to migrate the properties across to the new lender on a 4 phased arrangement over a 12 month period. The first phase completing within 8 weeks and offered up an additional £300K in free capital with which to seek new properties , phase 2 with in a further 12 weeks releasing the balance of £200K of new funds required. Phase 3 completed in November and the final phase due early 2013.
Rewards - Due to the specialist, non standard, nature of this transaction we agreed with the client that the lender would fund a total fee for our services of £15K for our facilitiation of the re-structure , this was agreed to be added to the loan and 50% paid on completion of phase 1 of the project and the balance paid on completion of phase 4.
Brokerplan Revenue Fact - Buy To Let & Investor Mortgages
On more straightforward cases the average sized £175,000 Buy To Let Mortgage transaction completed will typically generate fee income of circa £1,000 As an experienced and established Buy To Let advisor many of your clients will be Professional Landlords looking for mortgage offers on a regular monthly basis as they build up their portfolio or potentially look to re-finance an existing portfolio of properties.
Case Study - Asset, Equipment and Vehicle Finance.
The provision of vital Business Assets using Leasing , Contract Hire and HP Terms is a key area of the UK Financial Services market. The Brokerplan programme will teach you the key elements of successful underwriting in this sector of the market and a clear understanding which Partner Funder to route and deliver your Business Opportunities.
As an experienced Asset Finance Broker you will provide much sought after finance for a broad range of equipment, machinery and vehicles including cars , vans, buses, trucks and ‘Yellow Plant’ including JCB’s, excavators etc.
Client Requirement - Our client an established commercial van rental operator in Bedfordshire running 28 vehicles required a cash input of £175K with which to purchase some new vans and also to fund the deposit to acquire the freehold of the site from which the business operated. The majority of the existing vehicles in the fleet were under 4 years old and 17 of the vehicles had no borrowing secured against them.
Solution - Following an appraisal of the trading performance and profitability of the business the first stage of the process was to assess the current market value of the 17 vehicles owned with no borrowings against and this equated to £221K . We agreed with a general lease funder to advance £100 K against these assets over a 36 month finance lease term at an equivalent annual flat rate of 8.5%. The Managing Director of the business had significant equity of £300 K + in his home property and was prepared to give a personal guarantee for the £75K balance of the funding requirement with an agreed 2nd charge on the home property as comfort security for the lender. The lease finance arrangement completed with 4 weeks and the client was able to complete on the freehold site purchse.
Rewards - The Lease terms offered incorporated a disclosed Intermediary fee paid to ourselves of 5% of the funded amount = £ 8750
Brokerplan Revenue Fact - Asset Finance Leasing & HP Funding
One average sized £100,000 Asset Finance transaction completed will generate total fee income of circa £5,000 Asset Finance deals are generally faster than property related contracts and will typically take around 2 − 4 working weeks to complete all the necessary underwriting to funds advance and commission payments.
Case Study - Cash Flow Finance , Factoring and Invoice Discounting
Factoring and other forms of Invoice Finance provide a vital service to any new start or SME Business. The client will receive up to 85% of the value of any Invoices raised within 24 hours of issuing the Invoice and the balance is paid as and when the invoice is fully settled ( less charges applied).
Of the 5 million + businesses registered in the UK only a very small percentage are currently using this valuable and cost effective service. You will get immediate access to a panel of 20 Factoring and Invoice Finance Partners all keen to support viable businesses whether new start or well established.
Your reward will be a significant share of the service fee ( Typically 15-20% ) for the entire life of the agreement between the Factor Partner and your client which on average extends to between 36 - 48 months from inception.
Client Requirement - The client scenario was a management buy out of a specialist industrial lighting manaufacturer based in Northumberland. The company had suffered some severe trading and cash flow difficulties over the previous 18 months with one major client failing and with no bad debt provisions in place. The family owners and two Managers within the business had agreed a buy out arrangement and the new owners were keen to set up a Factoring facility with appropriate provisions to assist cash flow coming in to the business. A significant proprtion of the client base are in the construction industry which can pose problems with many Banks due to the contractual complications inherent within this sector.
Solution - Understanding the specialist nature of the sector we approached a Factoring company whom we knew had a flexible approach to construction related businesses. A meeting was arranged with the week which included a comprehensive discussion and audit of the sales ledger to assist the underwriting process. Within a further week the lender had completed the necessary due diligence and offered the client a facility of £200K on a recourse basis which equated to 40% of projected turnover and with 80% of invoice value being made available withn 24 hours of invoice issue.
Rewards - Based on the agreed facility service fee and anticipated ongoing usage of the facility we estimated a monthly commission topping out at circa £200 per month. During the first two months of the agreement we have achieved £145 and £180 monthly commission payments and therefore this projection is seen as accurate.
Brokerplan Revenue Fact - Factoring & Invoice Discounting Services
A typical £170,000 Factoring facility agreement will deliver average monthly fees to you of £180 per month, every month for the life of the agreement. A typical agreement lasting circa 4 years will net you an average £2160 per annum or £8,640 in total − FROM JUST ONE AVERAGE CONTRACT SIGNED!
Case Study Short Term or ‘Bridging’ Finance
Bridging Finance provides your clients with quick access to secured funding for any legitimate purpose. This could be in relation to a home move to secure that ‘must have‘ property, to secure a Residential or Commercial investment property at below market value or simply to raise cash for other Persoanl or Business requirements.
Whatever the reason you will be providing these clients with sources of funding to meet their needs quickly and efficiently and of course ,all fully compliant with Financial Services Regulations. The provision of short term Bridging Finance is one of the major growth areas within the UK Financial Services market.
Client Requirement - The client runs a London based business importing cotton goods from China and had secured significant orders from a number of leading charity organisations here in the UK. The opportunity arose to negotiate very significant discounts with suppliers if orders could be pre-paid prior to production. The forward ordering schedule was anticipated to be cyclical at circa every 4 - 6 months and the client needed a revolving credit facility of £200 K to be available to manage this phase of business growth.The MD of the business owned an investment property in the Yorkshire Dales , rented to long term tenants , valued at £280K and with no mortgage on the property.
Solution - We offered the requirement to a major Bridging Lender Partner who had declared a willingness to offer the 'revolving' credit facility requested. The underwriters would secure future advances by leaving their charge on the property with the land registry.The property was valued at the expected level within a week and the legal process completed the following week and the first draw of £200K completed 3 weeks from initial enquiry , the loan was repaid within 2 months from business income generated . The client, as anticipated, requested the funding line again in October 2012 for further advanced stock purchases and on this occasion £185K was provided to the client within 4 days.
Rewards - Following the initial advance our fee and commision payment was agreed at 2% overall on the £200K advance = £4K . On future advances we have agreed a 1% fee with the client ( paid by the lender ) and therefore the October draw down of funds paid us £1,850. This one project promises to yield circa £5K + per annum for the life of the agreement.
Brokerplan Revenue Fact - Bridging & Short Term Funding
One average sized £200,000 Bridging Finance transaction completed will generate fee income of circa £3,500 By nature Bridging Finance transactions are very quick to put in place and on average you will be completing the deal and earning your fee income and commission within 2 to 4 weeks of commencing the underwriting of the case
Personal Residential Mortgages and Secured Loans
In addition to the broad range of Commercial Products you will also have the opportunity to provide your clients with personal Residential Mortgages and Secured Loans. Giving direct advice to clients on ‘regulated’ Residential Mortgages requires the advisor to hold the CeMap qualification and be either directly regulated by the FSA or to work with a regulated and qualified partner such as the Brokerplan Mortgage team.
Secured Loans can be provided to clients seeking to raise funds using their home property (or other owned property ) as security for the loan on a 2nd charge basis.
Brokerplan Revenue Fact - Secured Personal Loans
One average sized £35,000 Secured Loan transaction completed will generate fee income to you of circa £1,200 . Secured loans are generally completed within 3 weeks from initial enquiry working with a panel of 8 -10 lenders in this segment of the market.