Hey there all,


I'm wondering if any of you guys know of any lenders who will loan to limited companies with the companies assets used as security. For instance; if I purchase a property for £1 million (ie with a 10% yield); I will put up £200, 000 cash and the remaining £800, 000 will be loaned to me secured only against that specific property (with no director guarantees etc..)

This way will allow us to limit the downside of any property investment theoretically to the deposit that we effectively pay just incase prices do drop significantly or we're unable to meet the loan repayments.

If any of you guys know if this is possible then I would love to hear your ideas on this kind of arrangement and also what kind of companies allow you to do this.

Many thanks,

You'll need to structure it as proper company complete with accounts and cash flow forecasts but the likes of mortgage express, GMAC etc will loan to "Special Purpose Vehicle Limited Companies" without personal guarantees expect the rates to be very expensive if you have no trading history. Given a few years of solid trading and a more mainstream business lenders might be willing to offer financing or refinancing.
Rental cover and low LTV's mark SVP/LLC lending out as a very different kettle of fish from personal BTL lending.

Best bet is discuss this with a professional accountant and solicitor about how you structure such a company.

Thanks a lot for that b0rk.

Yeah we do have a decent trading history (over the past 20 years or so) and are quite lucky that we have quite a lot of equity built up over the years; however I think the time has come to expand a little more aggresively so that's my reason for seeking out these kinds of loans (like most of you guys here; I think the property market is overvalued and would want a certain degree of protection if it did all go belly-up.)

You mentioned low LTV's, was that a typo? Mortgage Express (not available in Scotland) want a LTV of 70% without director guarantees. Do you know of any others who would want a lower LTV?

Are the high rates (base + 2.5% for mortgage express) paid on these loans the only thing stopping people from entering into arrangements like this? Is there any other downsides; I can't think of any but am sure there is.

Many thanks in advance

70% LTV is low in comparison to the main BTL market which will consider 90% or even now 100% *shudder*. I'd expect 70% LTV + 120/130% rental cover to be the rough requirement for other lenders.
Obviously you'll need to meet the rental cover demanded by the lender which makes deals difficult to stack up unless your inputting a large deposit. Again the main market is far more lax in this regard.
My personal feeling is that the high rates are the primary reason why most midsized portfolio's won't be structured as proper companies, IMHO the best route is to fix for however long you plan to keep the property say 10 or 25 years. Then sell or refix.

The vast majority of amateur portfolio's simply wouldn't be viable if they where proper companies, which is probably why SVP lending is still considered unusual.