Omega were approached by a client in the process of incorporating their personally held BTL properties, having taken advice from their accountant to do so. The transaction at full market value structured to include Directors Loans within the newly formed limited company, the Directors Loans forming the gifted deposit.
The principal problem faced related to the clients’ intention to repay these outstanding Directors Loans through surplus rental generated over and above the Lender repayments and ongoing management costs. However, the Lender security package included a Deed of Subordination ultimately precluding the client from being able to repay this loan or draw income through this route.
We were able to provide the client with terms from a lender which matched that already being progressed but without the security restriction imposed, allowing our client the ability to incorporate their portfolio and benefit from repayment of the Directors Loans created through profits generated over time.