2XL Commercial Finance Ltd has seen many situations over the past few months where investment property borrowers, who have previously enjoyed interest only facilities from their funding providers, have been advised that terms are to be restructured, resulting in repayment profiles being required.

This scenario is becoming increasingly commonplace and if implemented can have a dramatic impact on the borrower;

• Surplus rental income is used to repay capital whereas previously it was available either to support the drawings requirement of the borrower or to assist with future property acquisitions.
• In some situations, the level of capital reductions suggested leave little or no room for the payment of either personal or corporation tax
• Often with the suggested restructure, there is a mandatory hedging arrangement which increases costs
• The borrower is unable to take advantage of market conditions to and acquire new properties as the cash flow generated from existing properties is used to pay down existing bank debt.

We have been successful in refinancing facilities with new lenders on an interest-only basis for both residential and commercial property portfolios. Subject to loan to value and rental income requirements interest only facilities for up to 10 years have been achieved.

If you or any of your clients are in a similar position please do not hesitate to get in touch. Similarly, if you have any type of commercial borrowing requirement we would be delighted to hear from you.