Somo completes £651k second charge to protect Worcestershire rural business

Somo has completed a £651,000 second charge facility to support the structured refinance of a well-established rural business in Worcestershire.

The borrower required a time-sensitive refinance to redeem an outgoing second charge facility while maintaining trading continuity and avoiding default penalties.

The security comprised a mixed-use rural holding of approximately 2.38 acres, including a residential dwelling alongside workshop, office and warehouse buildings used by the business.

The combination of residential and commercial elements required careful structuring to ensure clarity of occupation and enforceability of security.

The £651,000 facility was secured at 65% LTV against the £1.65m asset, sitting behind an existing Santander first charge, with full consent obtained.

Part of the redemption funds were due from a secondary source 72 hours after completion, creating a potential timing gap. Somo’s Underwriting Director engaged directly with the outgoing lender to agree a pragmatic solution, enabling the charge to be released upon receipt of Somo’s funds and preventing default interest or penalty fees from being triggered.

Somo’s solicitors also formalised the lease and occupation arrangements across the residential and commercial elements to ensure clarity for all parties.

The secondary funds were received shortly after completion and the outgoing lender was repaid in full as structured.

The transaction was supported by an established trading history, a clean credit profile, verified projected income of £160,000 and a clearly defined six-month exit via open market sale, currently marketed at £2m.

Rob Johnson, Underwriting Director at Somo, said:

“This case demonstrates how second charge lending can provide a controlled, strategic solution where timing and coordination are critical.

Rather than allowing a technical default to arise, we worked directly with the outgoing lender to structure a practical outcome that protected the client’s business and security position.

When deals involve mixed-use assets and multiple funding sources, communication and decisive underwriting make all the difference.”

The refinance completed without financial penalty, protecting trading continuity and strengthening the security position on a complex mixed-use rural asset.

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