September 30th, 2016.
Deal of the Month: Commercial Mortgage Funding for Charity Headquarters
Working with charities can provide particular difficulties, but this deal was more challenging than most. Other lenders had been approached, but were unable to overcome concerns.
Lending to a charity was the first worry. Many banks are not keen on granting funding for charitable organisations as the lender’s reputation can be ruined if it ever has to take possession of a property from a charity.
Secondly, because the deal was for a farm, it was difficult to secure finance. Many lenders are not keen on property with an agricultural use, and this one was in a particularly poor state. To add to this, due to time restraints, they had done their own valuation instead of enlisting the services of a qualified RIC surveyor.
These challenges were multiplied by the fact that the client was under increasing pressure from the vendor to complete, or they faced losing the property.
Our wide range of contacts led us to approach Devon & Cornwall Securities, because of their flexible underwriting and commercially-minded criteria which we knew would match the demands.
Following a site visit and survey, the deal was completed quickly – despite a hiccup involving the client’s bank holding the client’s deposit money for two weeks for no known reason which almost led to the collapse of the whole process.
However, patience won the day. The issue was eventually resolved to everyone¹s satisfaction and the farm is now being used as the charity’s headquarters.