Strategic Expansion For A Manufacturing Business

The client:
A successful manufacturing business approached us with plans to purchase a second unit within the same industrial estate to expand their operations. They already owned a factory valued at £1,000,000, with only £400,000 left on the existing loan—putting them in a strong equity position.

The challenge:
Rather than take a separate commercial mortgage on the new unit, the client wanted to refinance and expand borrowing under one consolidated facility—while keeping costs and fees to a minimum.

Key requirements:
• Secure £600,000 in additional borrowing to purchase the new site
• Avoid arrangement fees on the existing loan
• Achieve more favourable interest rates for both facilities
• Consolidate borrowing into one manageable structure across both properties

The solution:
We negotiated a highly efficient commercial finance package with a lender willing to:
• Reduce the interest margin on the original £400,000 loan from 2.5% above base to just 1.75%
• Waive all arrangement fees on the original facility
• Apply a 1% arrangement fee only to the new £600,000 borrowing
• Secure a single charge across both properties for simplicity and reduced legal cost

The outcome:
The client successfully secured a total borrowing facility of £1,000,000 on the following terms:

• Loan: £1,000,000
• Interest rate: 1.75% above base rate (4.25%) = 6.00%
• Arrangement fee: 1% on £600,000 only
• Term: 20 years
• Monthly repayment: £7,164.31
• Security: Both factory units under a single loan

This strategic approach allowed the client to unlock equity efficiently, secure improved pricing, and avoid unnecessary duplication of fees or legal work. With a simple, consolidated commercial loan and full expansion funding in place, their business is now positioned for long-term growth.