Large Mortgage for Business Owner with Complex Offshore Holding Company and Trust Structure

If your business has a complex ownership structure involving offshore holding companies and trusts, you’ll probably struggle to get a mortgage from a mainstream lender.

High street banks and building societies are set up to process ordinary mortgage applications in bulk. When things become too complex, it’s more efficient for them to reject your application and move on than it is to sink hours into your case.

This is when most people turn to a specialist mortgage adviser for help.

The Scenario

Our client approached us, having been turned down by multiple high street lenders due to his company's ownership structure.

He was the majority shareholder of a very successful care home business and was looking to use the net profits of his company to qualify for a £1.4m mortgage on a new £2.2m SE London home.

However, he was facing two main problems.

Firstly, his business was owned by an offshore company in Gibraltar, which was held in an overseas trust for tax purposes.

The lenders he’d approached had flat-out rejected his application as they’d struggled to verify the ultimate beneficial owners of the company.

It’s not as simple as just searching the business on Companies House as you would with a typical UK business. It’s an unusual scenario for which most lenders do not have the necessary expertise and procedures to process efficiently, so they don’t.

And secondly, the client also owned a separate business comprised of numerous activity parks throughout the UK.

As you have to declare all of your assets when applying for a mortgage, this business was also looked at by the lenders he’d applied with.

The company was loss-making and still in a relatively early phase of growth and development. Despite having great potential, the banks he’d applied with wouldn’t carry out a detailed overview of the business, which was the nail in the coffin for his mortgage application.

The Solution

Our broker started by thoroughly understanding our client's overall assets and income streams.

With over £20m of business interests, it was a complex financial portfolio to digest. This was essential to getting the best deal for our clients and successfully leveraging their wealth towards their commercial mortgage application.

With the information gathered and our strategy in place, we contacted a private bank that we knew would undertake a bespoke analysis of our client's businesses and assets.

Our broker liaised with the client's accountant and the specialist underwriters at the lender to ensure they would accept the complex structure of the care business.

And the lender also carried out a more in-depth review of the loss-making business.

Although it was yet to make a profit, it had cleared most of its debt and could prove that it was now in a sustainable position to do significantly well in coming years - and throughout the term of the clients’ mortgage.

On the same day, we took our client's case to the lender, we had an initial ‘yes’ in principle, giving our client peace of mind. Within a month, we had a full credit approval subject to a valuation on the property, thanks to our broker’s commitment to the case.