At Knights Row, we pride ourselves on delivering bespoke financial solutions tailored to meet the unique needs of our clients. In this case study, we explore how we helped a thriving dental practice unlock the equity in their business premises to fund an exciting new venture.
The Opportunity
Our clients, partners in a successful dental practice, sought to release £280k from their business premises. Their goal was to use these funds for an external, non-dental related project. Our task was to devise a financial strategy that would allow them to achieve this while ensuring long-term financial stability.
Financial Objectives
The dental practice partners aimed to:
Release £280k from their existing business premises.
Allocate these funds towards a new, non-dental related project.
Overview of Business and Property
The dental practice operates as a partnership, with the business premises held under a separate limited company owned by the partners. Here’s a snapshot of their financial standing:
Market Value of Property: £375,000
Outstanding Mortgage: £73,600
Annual Turnover: £950,000
Gross Profit Margin: £364,000
Adjusted Net Profit: Initially £8,000, reassessed to £150,000
Strategic Approach
The primary challenge was validating the net earnings with the clients’ accountants, leading to an adjusted net profit figure of £150k. This adjustment was crucial for passing the affordability assessments required by lenders.
Our strategy involved a comprehensive search, engaging with various lenders from owner-occupier, commercial investment, and healthcare finance sectors. This inclusive approach was vital to secure a solution that catered to the unique non-dental funding requirement.
Achieved Results
Through meticulous research and negotiation, we procured a bespoke financing solution ideal for the healthcare sector. Here are the details of the financing secured:
Loan-to-Value (LTV): 95%
Total Loan Amount: £353,000
Settlement of Existing Mortgage: £73,600
Equity Released: £279,900
Terms of the Loan
The loan was structured with favourable terms to ensure financial predictability and flexibility:
Fixed Interest Rate: 7.35% until February 2024
Monthly Repayments: £2,832.54 over a 20-year term
No Penalties: For early repayment or overpayment
Product Fee: 0.7% of the loan amount
Conclusion
By securing diverse funding solutions and collaborating with a lender to create a specialized product, Knights Row enabled the dental practice partners to fully leverage their business premises. This strategic financial maneuver has empowered them to embark on new ventures with the capital they needed.
For more information on how we can help your business unlock its financial potential, contact us at Knights Row.
Contact Us
Phone: 0333 339 5905
Email: hello@knightsrow.co.uk
Website: www.knightsrow.co.uk
Take the headache out of arranging your commercial finance needs with Knights Row.
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