Example Term Loan: 2,300,000 for expansion capital, Wales, 60% LTV, 1st Charge

Background

Why did the borrower need the loan?

Install a new barn with biomass heating systems and drying floor for local heating of houses, milking parlour and drying 40 tpd of green bedding, as well as securing the Renewable Heat Incentive.

Why couldnt they raise funds from traditional lenders?

The farmer was locked into a long-term facility with a high street bank that was unwilling to help them expand their business. The farmer decided to pay the high exit fees so that they could access new capital and grow their business.

Why were we selected?

Our teams thorough approach allowed us to have an unbiased assessment of the
borrower, where their expertise spanning over 30 years was taken into account.

Key Loan Terms

Amount:
2,300,000

What did we see that others
didnt?

We appreciated that once the biomass facility became operational there would be a valuation uplift enabling herd expansion, supported by favourable milk prices.

Term:
84 months

LTV:
60%

Security:
1st Charge

What is the expected exit?
Refinance to high street supported by better cashflows due to increased profitability and the RHI.

Use of Proceeds:
Expansion capital

Exit:
Refinance to high street

Rate:
7.5%