Keystone Commercial Funding

Case studies

Four deals, and how each one was solved.

The structure is usually the interesting part of a case rather than the rate. Each of these had something in it that would have held up a straightforward application — a deadline, a valuation that came back short, a title problem, a break clause — and each one found a way through.

Amounts and identifying details are left out as a matter of course. What is worth reading is how each was put together.

Bridging finance into a commercial mortgage

A bridge that had to beat a lease expiry.

The situation

A trading business had occupied the same unit for eleven years and the landlord offered them the freehold — with a short window before it went to the open market.

Their own bank was willing in principle but could not underwrite a term loan inside that window: the current year's accounts were not yet filed, and the affordability case rested on them.

What we did

We took the purchase on a bridge secured against the unit itself and, as additional security, an investment flat the director owned outright. That second charge was what made the loan to value work without a cash injection the business could not spare.

Before the bridge was drawn, we ran the exit: we put the case to two term lenders on the draft accounts and obtained written criteria confirmations, so the refinance was tested rather than assumed. That is the step that was missing on the deal that started this firm.

Once the accounts were filed, the commercial mortgage completed and redeemed the bridge.

Outcome

The business owns the unit it had rented for eleven years, on a term facility priced off its own filed accounts. Because the exit was evidenced before the bridge was drawn, the refinance completed without a repricing.

Facility summary

Facility
Bridge to term
Two stages, one broker throughout
Purpose
Freehold purchase
Owner-occupied trading premises
Security
1st + 2nd charge
Trading unit plus a director's investment flat
Exit
Commercial mortgage
Criteria confirmed in writing before the bridge was drawn
Outcome
Freehold secured
Inside the landlord's window, with the term facility already lined up

Two further cases

Facility
Development
Land advance plus staged build drawdowns
Scheme
Office to residential
Permitted development conversion
Cost plan
Rebuilt with a QS
Resubmitted with contingency the surveyor would sign off
Outcome
Facility resized
Land advance restructured so equity was not consumed at purchase

Development finance

An office conversion where the cost plan came back light.

The situation

A developer had permitted development rights to convert a vacant office building to residential units, and a cost plan built from a contractor's budget estimate rather than a measured schedule.

The initial monitoring surveyor's report marked the build budget up materially — enough that the facility as originally sized would not have finished the scheme.

What we did

Rather than argue the report, we had the cost plan rebuilt properly with a quantity surveyor and resubmitted, with the contingency increased to a level the surveyor would sign off.

The facility was resized against the revised total cost, and the day-one land advance restructured so the developer's equity was not all consumed at purchase.

Outcome

The scheme was funded on a cost plan the monitoring surveyor accepted at first report, so the facility was sized once rather than revised mid-build — and the developer's equity lasted to practical completion.

Facility
Refurbishment bridge
Purchase plus staged works tranche
Condition
Unmortgageable
No kitchen or bathroom, structural repair outstanding
Title
Unregistered
First registration run in parallel with the loan
Outcome
Completed on time
First registration run in parallel rather than after

Bridging finance

An auction lot with no kitchen and twenty-eight days.

The situation

An investor bought a mid-terrace at auction with no kitchen, no bathroom and a section of the rear wall requiring rebuilding — unmortgageable in that condition, with contracts exchanged on the fall of the hammer.

Twenty-eight days to complete, and a legal pack that showed the title was unregistered.

What we did

We had read the legal pack before the auction, which is the only reason the timescale worked. The unregistered title was flagged to the lender's solicitor on day one rather than discovered in week three, and first registration ran alongside the loan rather than after it.

The facility funded the purchase and the works in two tranches, with the refurbishment drawn on completion of the structural repair.

Outcome

Completed inside the auction deadline. The works tranche funded the structural repair and the refurbishment, and the property was mortgageable — and refinanced — once it was habitable.

Commercial mortgage

A refinance held up by a tenant-only break clause.

An investor wanted to release equity from a let industrial unit. The lease looked strong on paper — a fifteen-year term to an established covenant — but carried a tenant-only break at year three.

Two lenders had already sized the facility on a three-year effective term, which cut the loan well below what the investor needed.

We placed the case with a lender that would look through the break to the tenant's covenant strength and the unit's re-lettability, supported by an agent's letter on local industrial demand and evidence of the tenant's fit-out spend.

The investor released materially more than the first two lenders had offered, on a facility sized against the lease as a whole rather than against its earliest break date.

Facility
Commercial mortgage
Investment refinance, equity release
Asset
Industrial unit
Single let, established covenant
Issue
Year-3 break
Two lenders sized the loan on a three-year effective term
Outcome
Equity released
Placed with a lender that looked through the break to the covenant

A note on these

Each case describes a structure we work with regularly, written up without amounts or identifying detail. Our clients' borrowing is their business, and we would rather show you how a deal was solved than what it was worth.

If you would like to talk to someone who has been through something similar, ask — several clients are happy to take that call.