
Digital entrepreneur moves to cotswolds for lifestyle change
Borrower:
Digital Marketing CEO
Loan amount:
£4m
Term:
5 years
Repayment:
Interest only
Security:
–
Loan to Value:
65%
Interest rate:
–
Summary
Ashbridge Partners helped a Digital Marketing Entrepreneur and their family relocate to the Cotswolds, meaning a rural lifestyle change on a 600 acre residential farm.
Through well-considered case management, sensitivity analysis, and a network of trusted contacts, the process took only two months, meaning that the family could move in time for the new school year.
Goal
Our entrepreneurial client is the co-founder and CEO of a young, very successful, fast growth digital marketing agency, based in London. They decided to make a lifestyle change and relocate to the Cotswolds with their family, having recently taken money out of the business through a Private Equity investment.
We were introduced by their search agent who had successfully found the right property, a 600-acre residential farm. The farm would be a source of funding, but the main goal was better quality of life for the whole family.
Our mandate was to secure finance which would take account of the proposed farming income generated, and would be structured around the expected future receipts from the client’s business. This would include salary, dividends, the repayment of loan notes, and further equity rounds anticipated as part of the initial investment.
Challenges
Our client had no farming background but was drawn to the opportunities to invest and develop new enterprises on the farm. This included tourism and leisure, as well as renewable energy and sustainability.
We needed to present to lenders who understand the sector, and who would be comfortable with the income profile and ultimate means of repayment. The farm had existing income through a contract farming operation, property rents, environmental schemes and farm subsidies, with the potential to increase income through diversification and the client’s investment plans.
The interest-only facility could be serviced by the existing farm income, but importantly allowed for revenue to build, and reflected the expected pay-out profile of the loan notes before any need for structured amortisation.
With the new school year start date nearing, the aim was to have the family in situ on the farm within two months of applying for finance.
Added Value
- With £4m secured at 65% Loan to Value, our client and their family now enjoy their Cotswolds lifestyle change in the countryside.
- We maximised the gearing and preserved the client’s cash for re-investment into the property.
- By working with the borrower and advisory team, we modelled the likely cash flows to include tax liabilities and other commitments over the term, which gave the lender sufficient comfort in the interest only aspect of the loan.
- The process took only 2 months from instruction to completion due to our network of trusted and skilled professionals in bank credit, legals and valuation, and a well-prepared financial model.
- Their children were able to start their new school on time, meaning a smooth transition to their new community.
Next Steps
- As the client’s trusted advisor, we will nurture our relationship with them to ensure their financial situation accommodates the family’s changing needs