Location: Okanagan
Industry: Insurance brokerage
Annual revenue: $3,500,000+
Loan products: Commercial mortgage, operating lines, and corporate credit cards
Total credit facilities: $6,250,000
Lender: Chartered bank
Primary goals achieved: Lower costs, Additional leverage
The owner of an established and profitable insurance brokerage with multiple Okanagan locations was referred to Lakepoint by their fractional CFO.
Several years ago, the owner had required almost 100% financing to construct an owner-occupied property, and as a result had used a higher-cost lender to achieve this. As the loan was paid down over time, refinancing with conventional financing not only became viable but was the most prudent economical decision to make for the business.
When Lakepoint was engaged, the owner had an offer from a chartered bank for 75% of the property's appraised value, amortized over 25 years.
However, an updated appraisal came in lower than hoped, and 85% loan-to-value was needed to refinance all of the existing debt. The lender did offer additional financing to the client to get to 85% loan-to-value, but amortized over only 5 years, which significantly increased the principal repayments required.
On behalf of the owner, Lakepoint created a detailed Request for Financing and approached other banks to find a better solution – and did. We successfully secured a 90% loan-to-value option, with better pricing than the owner's initial offer, amortized over 22.5 years.
After considering Lakepoint’s fee, the solution that was arranged for the owner saved them over $50,000 (net) in interest, bank fees and other borrowing costs over a four-year term, and over $400,000 in principal payments over the same period.
The owner is now happily saving over $8,000 a month in principal and interest payments as a result of engaging Lakepoint Capital.
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