A division of Bespoke Bridging, one of the UK's longest established private bridging companies, Bespoke Business Finance & Consultancy has successfully negotiated for clients who had previously been turned away by several other financial institutions, an additional debt reduction with a big four UK bank.
Managing Director and driving force behind Bespoke, Lee Selbo, described the situation. “This was one of the more challenging cases we have taken on. The value of the client's assets had dropped from in excess of £14 million to £7 million on a RICS red book valuation.” He added, “To complicate matters, the client was an unlimited partnership of which five members faced bankruptcy. As their previous professional advisors could not find a mutually agreeable solution, the bank had served notice giving seven working days to repay the loan or have Administrators appointed.”
Bespoke's first challenge was to convince the bank to grant a realistic extension that would allow time for the company to find a viable solution with the funds required to action it. Selbo explains, “We analysed the assets and business of the client together with their personal needs and restructured the loan and trading businesses within a strategy that made them viable and gave the partners a financial future.”
This process is atypical for the bridging and loan industry, which would normally have deemed this client unacceptable for funding. Standard practice is to determine the suitability of a candidate for a loan based on an analysis of the initial application and whether the information provided meets pre-established criteria. Bespoke departs from that structure, with Lee Selbo at the helm, employing diverse and proven experience across a broad range of business categories to analyse each unique situation, identify the problem and develop a solution that accommodates all invested parties.
As Selbo describes: “Difficult loans which cannot be funded are not necessarily bad loans, but just loans that are badly structured. What we do that other bridging and consulting companies don't do is use our experience and expertise in this field to reduce the problems faced by the business to its most fundamental parts and restructure it within a strategy that results in the ability to fund.”
After a comprehensive analysis of the business, Bespoke developed a fitting plan. The assets were spread over trading businesses, which could continue to operate and possibly be expanded, as well as residential, commercial and agricultural property. Certain properties needed to be disposed of while others required a change of use and/or development into luxury residential apartments, houses and other leisure uses. Bespoke strategised, structured and negotiated the entire process to achieve these results.
A director of the bank described that “working with Lee Selbo and Bespoke has been a pleasurable and positive experience.” He continued: “In this instance the client introduced Bespoke to the bank and it was through Lee Selbo and his team's diligent, transparent and detailed due diligence and restructuring of the assets, together with their desire to protect the long term outlook for the client, that allowed the bank to agree this level of impairment. Indeed, the bank's confidence in Bespoke has meant that we have recommended several of our clients to them.”
That confidence is reciprocated by Selbo: “We could not have achieved such a successful result without the bank's understanding, cooperation and assistance in agreeing to accept a purchase of their debt at the reduced amount.”
“Negotiating positive outcomes for UK businesses that have hit a hurdle helps secure our clients, their financiers, employees and ultimately the economy of our country,” said Selbo. “We believe in what we do, and we use all of our experience and know-how to help our clients develop solutions to their business problems.”
This project was part of a more comprehensive plan that required the bridging division of Bespoke to be in a position to advance £5m to a Newco in order for it to purchase the bank debt plus all purchase costs. Fees and interest could also be rolled up. Development finance was also available subject to planning.
Selbo concluded: “Together with our partners, we have broad experience of businesses, be they property or non-property related. We know how to add value and structure a deal that suits all parties. In addition we can bring funding. It is this combination that sets us apart from the majority of business advisers.”
As reported by Bridging Loan Directory and Introducer Today.
