Equity Release

In a mortgage context, ‘equity’ is the excess of the market value of a property over the outstanding amount of any loan or loans secured against it. Equity release plans enable homeowners who have a mortgage on their property to release equity to offer capital or supplement their income.

CASE STUDIES

Refinancing in Potts Point on commercial property

• Property details

On a side street in Potts Point, they zoned the property mix use and facilitated short-term accommodation.

• What did the client want?

The client was an Australian ex-pat, living and working in the UK. They were looking to offer their property security to raise funds for future investments.

• Key points

Years ago, many mainstream lenders changed their view on accepting foreign income for servicing calculation.

• What did we do?

We worked the scenario with multiple lenders and provided a suitable solution.

• Difficulties along the way

The valuation came in lower than expected.

• The end results

Although the client received less cash out because of the valuation, we achieved a satisfactory result.

Equity release for business expansion.

• Business details

The business was an educational facility in South London.

• What did the client want?

The client was a UK resident who had before worked with our team at Sherwood Finance. They had wanted to sell their company for £11m a year ago – although they instead opted to continue with the business to expand on it a little more.

• Difficulties along the way

Since it was a loan backed by the client’s business and not an asset lend, there wasn’t any reliable security we offered. Most lenders are a little apprehensive about agreeing to offer a loan under these circumstances.

• What did we do?

We work with countless different lenders, so it didn’t take us long to find one that would help us. This one specialised in funding businesses that are trying to grow – and after negotiating and discussing specific details about the client and their needs, we agreed everyone was happy with it.

• The result

The lender was keen to work with growing businesses to get our client a loan of £2.5m unsecured. This allowed them to buy out a 10% shareholder and keep complete control of their company.