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Lloyds Bank Commercial loaned to me on a small studio at a cost of £40K, in fact they have never turned me down on any property - God bless 'em

I don't usually contribute to these "grown up" discussions but many landlords have found them helpful recently

Mary, am I right in thinking that all your facilities have been on commercial banking terms since day one? The certainly must have been for a very long time as you've been in the business since the 70's. Did you ever move away from that? Tell me to mind my own business if you like but if you are happy to discuss this stuff I'm sure plenty of people would find this very useful.  I switched from BTL to commercial terms in 2003 si I'd love to compare notes and I'm happy to do it publicly if you are. No personal financial details of course, just principles. What do you think?

Yes tried with Barclays 3 times since 2009 but it was a no no each time unfortunately. They are very conservative and by their own admission running scared since the CC. I`m too highly geared for them.

How do you find good refinance rates? I like 123 Refinance. They gave me the option of selecting various rates with different problems. I choose the lowest rate of 3.29% BTW Remember to call and verify the loan rate. Search online to find them.

Hi Melvin

If it's headline rates you are looking for then if you use our buy to let sourcing tool you will see that The Mortgage Works are offering a deal at 2.94%. You will also be able to play around with a variety of figures to establish which is the best deal for your risk profile in terms of LTV's, return on capital invested etc. You could also use the Number Crunchers in our Due Diligence section to input all of yor other costs in order to consider break even points etc.

I took a quick look at 123Refinance, went to get a quote and was instantly redirected to a spam page telling me You Won!, Tou Won! and offering me all sorts of prizes.  It was obviously american too. I think your comment is spam but I've approved it just to show people the rubbish that's out there. Our buy to let mortgage calculators are free to use, relevant to the UK and are available to any business that would like to use them on their website free of charge.

Hi Jonathan, it's unlikely that it will be economical for you to employ a commercial finance broker for this deal. As I see it you have three options:-

1) Do nothing
2) Sell the property - I appreciate this may have CGT implications and may not be viable for that reason
3) Arrange a meeting with all the banks in your town. Present the deal on the basis that you are looking to move your business banking. Take all your rent account statements with you. Explain that you also want an overdraft facility secured on an unencumbered property and this will be used to refurbish properties prior to refinancing with BTL lenders. Make appointments to see a business banker at HSBC, Lloyds, Santander, Clydesdale, Yorkshire Bank, Bank of Scotland, Nat West and RBS. Some of these are owned by the same groups but amazingly, they do compete with each other. Do not assume that business bankers understand buy to let, they dont! Take your accounts or tax returns with you for the last couple of years too, they will need these. A copy passport, driving licence and utility bill will also be required. If you take all that to the first meeting they will know you are serious. Make their lives easy and they are more likely to say yes. Remember this will be a very small deal for them too. Expect a pitch on life insurance, buildings insurance and other products.

Good luck and let us know how you get on, whatever you decide to do.

Mark my relationship with Lloyds began in the 80's when I had been a landlord for some time and had unencombered properties.  I did not want to risk loosing what I already had and I would not allow them to take charges on more than one property in addition to those I intended to buy.  Not only did they accept this but I also had the good fortune to have a bank manager who supported me and gave me a 12 month capital holidays. I eventually took a loan for £60K and bought 5 houses!!!! I took this on a fixed rate because I needed to know what my outgoings were. Was I glad when the rate shot up to 16% and I was fixed just below 10% but this was just luck

 I am still very naive about financing and tend to go with my gut feelings.  It was those gut feelings that made me revert to a variable rate 10 years later and again this turned out to be the right thing to do - another lucky accident.  Lloyds have been very good to me and I have a rate that makes most other landlord dribble and I know that if I spot a bargain I can just buy it because Lloyds will not let me down.  They may make my eyes water over set up costs but we all have to eat and I accept that - after a maga sulk to reduce the charge as low as I can or get a sweetner from them.

I have never used Buy to Let because I have remained loyal to Lloyds who were good to me and gave me the chance to increase my holdings when I decided to that this was were my future lay.

I don't know what else I can tell you I keep life simple when I can and I consider that I have more luck than good judgement

It's great to have these commercial relationships Mary, mine is similar with Coutts & Co. I tell them what I'm doing (warts and all) and so far they have supported every request. Last year I needed to do a deal quickly on an office investment and they advanced 100% of the purchase price (LTV was 60% due to a complex arrangement between pension schemes which I will not go into here for personal reasons). They also gave me a £200k unsecured overdraft facility at one point to allow me to buy at auction without having to redeem existing investments to raise cash. They were, of course, entirely secure at all times but they do make life very simple for me to do property deals. What I can't do of course is abuse that trust, otherwise it would be withdrawn very quickly. They review annually and I like that as they ask good questions and keep me focussed.

It's interesting what's happening in the market though and I've seen it before. In the early 1990's several banks needed to reduce their exposures to commercial property. It's happening again, especially the Irish Banks; Bank of Ireland, Allied irish Bank and Anglo Irish. They are calling in loans at review and developers and large scale investors are being forced to shop around. Imagine if Lloyds were to do that! Would you know what to do?

That's why we are getting lots of calls from very worried commercial investors and developers. It's also the reason we have set up these new enquiry forms.

It's rarely advantageous to switch banks but when people have no choice and don't know what to do and how to go about putting their arrangements to tender it is VERY important to employ professional help.

They can do it themselves, however, they will end up talking to a 25 year old who has to go through 5 layers of management to get a decision so negotiation is futile. Good brokers all have the high level contacts and as deals are priced individually it's important to know which people within the banks have an good understanding and an appetite for different types of deals. It's not uncommon for a facility to be declined by one manager and offered a variety of different terms from different managers all within the same bank. Incredible isn't it, but that's how the system works. The broker proposing a deal makes a big difference to the terms offered based on relationships, track record and his/her ability to present a deal to the right person in the right way. ankers will put a deal from an unknown broker to the bottom of their pile as they know it is likely to involve more work. We all like the easy wins don't we?

Mark if Lloyds Bank don't want my business after all these years and with my track record they need to get out of banking. My working class mentality has meant that repayment of debt is always top of the list 

To be honest I can see why some banks are nervous because I know landlords who are so over exposed that a small increase in interest rates or boiler replacement will put them in tilt.  I also know landlords who have not used the extra income from low rates to either upgrade their properties and increase the rental potential/decrease the void or pay down some of their loans.  I know its very tempting to "have a treat" when there is some extra cash but that treat may cost a landlord his financial security and I don't understand why they take the risk. It was always said that if the profits/rents fell we could just sell up but, as we all know, that is not a good option at the moment and many landlords would not be in a position to cover their outstanding loan and capital gains tax where they have continually geared up.

Last year a team from Lloyds Bank Commercial became my stalkers and spent many evenings and afternoons at landlords meetings listening and learning about our business.  I really respected them for doing this because, as we all know, there is a  subtle difference between a landlord who knows what he is doing and one who thinks he does and knowing the difference will help the bank to control their exposier whithout loosing the good will of valuable "safe" customers. Many landlords approached these guys and some have done business with them because they were available in a relaxed environment so that initial enquiries could be made hassle free.

Finance is not my bag Mark which is why I rarely post on threads like this although I always read them.  If Lloyds ever do kick me into touch I have this friend in Norwich who knows one more than the devil about these things and I know he would give me great advice 

Hi Mary

You are probably quite safe with Lloyds. Like Coutts & Co they have always been very grounded in their approach to lending, the only worries we have are that Lloyds were pressured into taking over the very maverick HBoS group and Coutts & Co are now RBS owned so I guess we can never be too certain of anything.

Thanks for the compliment by the way, you know I will always be pleased to help if you need it and that goes to any other landlords reading this, especially the victims of the Irish banking crisis.

It's hard to beleive some of the deals that are out there that the Irish Banks are no longer supporting. We are seeing some very large deals (£10 million + portfolio's) that are less than 40% geared and where borrowers have impeccable track records over decades. Can you imagine what these borrowers are saying when the banks are asking them to refinance elsewhere? Maybe the Greek banks will be next to follow suit?