Property finance and related party transactionsSpeak to one of our experts020 4525 5312
Finance for property
- Terms up to 20 years
- £50,000 – No Maximum
- Rates from 2% over base rate
- Up to 80% Loan to Value available
- Repayment and interest-only available
- Adverse Credit – no problem
- Any type of property
- Solutions tailored to your needs
- Specialist lenders
- Expert support
- No proof of personal income required
- Any type of property
Property finance and related party transactions
A related party transaction is a transaction that takes place between two parties who hold a pre-existing connection.
An example is how a director may benefit from making one of their companies trade to the other at advantageous prices. However, any indication that a property deal is a related party transaction may be a red flag for many lenders, who may see it as being against the rules of the FCA or other regulator at best, and at worst, an example of attempted fraud.
Table of Contents
A related party is a person or an entity that is related to the reporting entity or business. So a person or a close member of that person's family is related to a reporting entity if that person has control, or significant influence over the business or is a member of its key management team. If a company director was to purchase a property from his or her company at a price less than fair value, this transaction would be considered a related party transaction.
UK companies affected by the related parties rules must obtain board approval before entering into a related party transaction, ensure any director connected with the transaction does not participate in the approval process and publicly announce details of the transaction via its RIS as soon as it agrees to the terms. The announcement must include any information necessary to assess whether the transaction is fair and reasonable to the company and independent shareholders.
However, although it is necessary to follow the necessary procedures of notification when a company falls into the scope of the legislation, it is possible to secure funding for a related party transaction.
At Rangewell, we can work closely with you and your solicitor to ensure that the proposed deal is entirely legitimate, that it meets all the standards of reporting and probity required - and to secure the necessary funding.
Why you need Rangewell
Our ability to provide a solution to funding needs, even when there are challenges like related party transactions can be invaluable. We know the lenders to approach. There are many lenders who will be prepared to advance finance when it can be secured on commercial property, but not all will be able to help if there are issues such as related party transactions.
Knowing which lenders are most receptive to applications from particular areas can be key to securing offers of funding in the shortest possible time.
It is based on our knowledge of the business funding market, which includes an understanding of the various property-based lending products. In most cases, a commercial mortgage will be part of the solution for a business acquisition that includes the purchase of property, but this is not the only possibility. Other solutions such as short-term bridging loans may have a part to play in a funding package.
Unlike residential property purchases, commercial property funding rates are based on an individual assessment of the value of the property and the potential of the business. Rates will vary substantially between different lenders, We frequently negotiate with lenders to secure the lowest rates and the most favourable terms
Buying any business with property involves high costs, and it is important to have expert help to get the kind of funding that is most appropriate for your plans.
Rates are crucial. Even a fraction of a percentage point can make a substantial difference to what you will actually repay each month and understanding fees and penalty charges are vital to avoid extra costs.
At Rangewell, we work with lenders across the market - and we can call on the expert knowledge you need. It lets us ensure that you have the financial solutions you require when you are considering a business purchase. Our knowledge can not only help you secure the funding you need - but it can also save you a great deal of cash.
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
REAL EXAMPLES OF WHAT WE CAN DO
Provide help with the legal issues of buying form a relative
Secure funding for a related purchase when the banks were unwilling to get involved
Help a garage owner buy his premises from his father
Arrange funding for a marine engineering business to buy a dockside property from a retiring partner who was a cousin
Discover our range of finances
Every type of finance for every type of business
Our goal is very simple - to help businesses find the right type of finance as quickly, transparently and painlessly as possible.
Helping you build your profits
Specialist lendersExpert lenders will look at your credit profile, the value of the asset, and your business strategy to make a decision
All types of propertyResidential, commercial and mixed-use premises can all be bought from relatives
Working with third partiesWe will work with solicitors and others to overcome problems with this type of deal and the funding required
Working on your behalfWe frequently negotiate with lenders to secure the lowest rates and the most favourable terms
Expert supportWe work with lenders across the market - and we can call on the expert knowledge you need. It lets us ensure that you have the financial solutions you need
Reducing your costsur knowledge can not only help you secure the funding you need - it can save you a great deal of cash.