Market-Leading Rate. Interest-Only. Personal Guarantee Capped at 16%. Capital Released for Further Investment.
Client Profile
A long-standing Henry Dannell client: a family group with a substantial mixed-use real estate portfolio and multiple trading businesses. Their commercial finance had been structured for speed rather than strategy and arranged over several years on a convenience. It had become a material drag on both liquidity and growth potential.
Having worked with Henry Dannell across previous transactions, the clients returned to us with a clear objective: refinance their existing commercial debt, release equity for further investment, and put in place a structure that properly reflected the quality of the underlying asset.
The Problem: Expensive Legacy Finance Holding Back a High-Quality Asset
This is a situation we encounter regularly among established property investors and business owners. Commercial mortgages arranged in earlier growth phases, often with high street lenders or on whatever terms were available at the time, can quickly become misaligned with a borrower’s current position. The result is higher-than-necessary monthly debt servicing, restricted access to equity, and personal guarantee exposure that no longer reflects the strength of the asset.
For this family, the commercial mortgage on this existing property was draining monthly cash flow and creating a ceiling on their ability to fund new acquisitions. The property, a mixed-use asset comprising five units, valued at £1,800,000, was carrying far more cost than the asset merited.
Critically, the clients had not previously had exposure to the challenger bank lending market. Part of our role was demonstrating that viable, highly competitive alternatives existed beyond their existing lender relationships and then accessing those lenders on their behalf.
The Challenges: Why This Was Not a Straightforward Remortgage
Mixed-use commercial properties, particularly those with multiple tenants and non-standard occupancy arrangements, often sit outside standard lending criteria. This case presented three specific challenges that needed to be resolved before any lender would proceed:
1. COVID-Era Tenant Payment Arrangement
One commercial tenant remained on a payment arrangement agreed during the pandemic. The rent being received did not match the headline rent on the lease, creating an immediate inconsistency between the bank-verifiable income and the lease documentation. Most lenders rely on formulaic income assessment and would either have declined or significantly reduced the achievable loan as a result.
2. Licences to Occupy Sat Outside Standard Lender Criteria
This was the more significant legal obstacle. Several units were licenses to occupy and therefore not let on standard commercial leases at all. This is an important distinction: a licence does not confer the same legal protections or certainty as a lease, and it falls entirely outside the criteria applied by most mainstream and many specialist commercial mortgage lenders. The income from these units risked being excluded from the lender’s yield calculation entirely.
3. A Complex Legal and Financial Trail from Legacy Borrowing
Previous finance had been layered over time without a cohesive structure, leaving a disorganised legal trail across the title and loan history. Without active management, this type of complexity creates friction at underwriting, legal due diligence, and completion, potentially derailing a transaction at any stage.
The Henry Dannell Approach
Placing this case required us to move well beyond the role of a standard commercial mortgage broker. Our approach combined direct lender relationships, strategic credit positioning, personal guarantee negotiation, and hands-on execution management throughout.
Identifying A Suitable Lender
We identified a challenger bank with the appetite and flexibility to consider this asset on its merits, rather than through a rigid lending checklist. This lender was not one the clients had previously worked with or been aware of. Opening that relationship and presenting the case correctly from the outset was central to achieving the outcome.
Credit Positioning Through Direct Lender Contact
Rather than submitting a standard application and waiting, we used our direct contacts at the bank to present the deal in the way we saw it: an established, income-generating mixed-use asset with a strong underlying yield, owned by an experienced, long-standing property investor with a demonstrable track record. The licences to occupy and the COVID-era rent arrangement were contextualised rather than buried, and the lender was given the full picture rather than a filtered version of it. That approach, built on trust and direct access, made the difference.
Personal Guarantee Negotiation
A key client objective was reducing personal exposure. We negotiated a Personal Guarantee capped at 16% of the loan amount, a materially better position than the open-ended or high-value guarantees typically required on complex commercial transactions. This protects the family’s wider asset base, including personal property and other investments, from disproportionate risk.
Completion Day: Getting It Over the Line
The final challenge arose on the day of completion itself. The clients’ solicitors were working remotely and returned incorrectly completed documents, a situation that, left unmanaged, would have delayed completion and exposed the clients to unnecessary cost and risk.
We sent couriers to the clients’ office twice that day to collect and transport the documents directly to the lender’s solicitors’ London office, bypassing the remote working delays entirely and ensuring the transaction completed as planned. It is the kind of intervention that does not appear in a fee schedule, but it is often what separates a deal that completes from one that does not.
The Solution
| Property Value | £1,800,000 |
| Loan Amount | £1,009,800 |
| Loan-To-Value | 56% |
| Lender | Challenger Bank |
| Structure | Interest-Only Commercial Mortgage |
| Rate | 1.60% over Base Rate |
| Personal Guarantee | Capped at 16% of loan amount |
| Property Type | Mixed-Use. 5 Units. |
| Purpose | Capital Raise / Investment Remortgage |
The Outcome
Market-leading rate on a complex asset. At 1.60% over Base Rate on an interest-only basis, this is an exceptional outcome for a mixed-use commercial property with the complexities this deal presented. The interest-only structure maximises monthly liquidity, freeing capital for deployment elsewhere.
Equity released for further investment. The remortgage unlocked meaningful capital from the asset, giving the family the firepower to pursue further property acquisitions and support business growth, which was the primary objective from the outset.
Personal liability capped and protected. With the Personal Guarantee limited to 16% of the loan amount, the family’s wider balance sheet is now materially better protected than it was under the previous arrangement.
Access to a new lender relationship. The clients now have a direct relationship with a competitive challenger bank, expanding their options for future financing activity.
A professional debt structure built for growth. The clients moved from convenience-led legacy borrowing to a coherent commercial mortgage structure that reflects their current standing and supports their long-term investment strategy.
Is Your Commercial Finance Still Working for You?
Many established property investors and business owners are carrying commercial mortgages arranged years ago under different circumstances, often with personal guarantees they have never revisited, at rates that no longer reflect their asset quality, and on structures that restrict rather than enable growth.
A commercial remortgage is not simply a rate refinance. Done properly, it is a strategic restructuring of your debt, one that should reduce your personal liability, improve your liquidity, and align your borrowing with where your business is going, not where it has been.
Henry Dannell specialises in complex commercial remortgages and capital release across mixed-use, semi-commercial, and commercial investment properties. We work directly with specialist and challenger bank lenders who understand asset-backed lending beyond standard criteria, and we manage the full process from credit positioning to legal completion on behalf of our clients and their professional advisers.
If your current commercial finance no longer reflects your professional standing or your portfolio’s true performance, we would be pleased to review your position. Contact our team now to identify the best options in commercial property finance.
This is a case study and not indicative of typical results. Past performance is not necessarily representative of future results. This information is for general purposes only and does not constitute financial advice. Please seek professional advice before making any financial decisions.
