BTL Mortgage for SPV Wholly Owned By Holding Co

[darren-g]

I'm hearing conflicting information. Some people say that lenders don't like financing a group company structure while others are say that a group company structure achieves lower financing rates.

If there are any brokers out there, I would love to hear your opinions?

[Simon Allen]

Hi Darren

I get a similar question on SPV's and holding companies at least twice a week but your question is slightly different so I'll answer both parts.

Firstly it is correct some lenders don't like financing a group company structure. They prefer a traditional SPV with shares owned by the directors and this used to be the view of the majority.

However over the last few years more and more lenders have gone into the group structure market so a BTL broker who understands this will be able to find you competitively priced lenders.

The second part your question depends on the day of the week. It may be that today the best BTL rate in the market is from a lender who allows group company structures however next week there may be another lender who doesn't allow them. 

So the answer to does a group company structure achieve lower financing rates is No. As lenders don't differentiate between different types of ownership when deciding a rate.

[EvolutionBlogger]

On 3/18/2022 at 12:43 PM, Simon Allen said:

Firstly it is correct some lenders don't like financing a group company structure. They prefer a traditional SPV with shares owned by the directors and this used to be the view of the majority.

What are lenders like when it comes to having companies with different share classes? 

[Simon Allen]

14 hours ago, Vineet Gupta said:

What are lenders like when it comes to having companies with different share classes? 

A depends answer. Some lenders want all shareholders on the application which means providing information and signing a personal guarantee. Others don't if the directors hold a large proportion of the shareholding which is 80% with most.

Whilst you and I may think a different class of shareholding and whether they are voting or non-voting should be looked at differently, a lot of lenders will add all the shares together to work out the percentages owned.