Background:
This case study centres on a well-established Chinese restaurant that has been operating successfully for over 30 years, building a loyal and consistent customer base. The current owner inherited the business from his parents and had been managing it effectively for several years.
However, tragedy struck when both parents passed away in quick succession. As a result, the client was faced with a significant Inheritance Tax (IHT) liability, requiring a substantial sum to be raised quickly.
Challenge:
The client needed to raise £400,000 within a short timeframe to settle the Inheritance Tax bill.
The urgency of the funding requirement
The high cost associated with bridging finance, which made it an unattractive option
The need to secure a sustainable, affordable long-term solution
The owner approached Brad on the commercial team from Propp for advice, and we recommended remortgaging the property to raise the funds needed to pay off the IHT bill.
Solution:
After assessing the client’s circumstances, we recommended a commercial remortgage as a more cost-effective alternative to bridging finance.
Key elements of the solution included:
Sourcing a competitive 5-year fixed rate at 6.9% for a leisure property, including restaurants.
Identifying a lender experienced in funding restaurant and hospitality businesses
Managing the application process to ensure a smooth and timely approval
Propp submitted the remortgage application to NatWest, who quickly agreed to the loan. Within 3 weeks of receiving the case, NatWest sent a valuer to assess the property and confirm its value.
Outcome:
Thanks to the help of Propp and NatWest, our client was able to raise the £400k needed to pay off the Inheritance Tax bill. The remortgage deal offered by NatWest was affordable and gave our client the security of fixed repayments for the next 5 years.
As a result:
The tax obligation was cleared within the required timeframe
The client secured an affordable, fixed-rate solution, providing certainty over repayments
A costly short-term bridging loan was avoided
This outcome provided both immediate financial relief and long-term stability, allowing the client to continue operating a well-established business with confidence.
Chloe Rule
