How To Raise Money On Money?
Discussion
. 
. 
It don't work like that! Money is raised for a purpose. Anyone giving you money will be against a company (which has something of value, worth investing in). It has to be something tangible. Investments will be debt or equity based. You can borrow money based on your personal circumstances (guaranteed against house or suchlike) but not against money.
More info please?
More info please?
I have seen clients do offshore/onshore deals this way. They buy a property onshore, borrowing the money to do so and using rental income to cover the interest charges. Part of the security is an offshore bank account which is left holding the cash and is used to push the gearing up so they get a higher LTV on the acquisition.
I assume the way it works is that the offshore money earns interest tax free and the tax advantages generate a sufficient margin to make the higher gearing work. As less real money is paid into the deal any capital appreciation in the property generates an abnormally high rate of return on the investment. The offshore money does not come onshore to suffer tax deductions and the onshore deal is self contained - the offshore money only comes into the deal if there is a default on repayment of the debt.
Of course this only works if the money is offshore but it might be possible to do something by borrowing in Euros secured against the cash. UK interest rates being higher than continental ones should provide a margin if you can handle the exchange rate risk. That can get complicated as it means using swaps and hedging.
Don't know if this would help but it might be worth talking to corporate finance at one of the banks to see if they can structure a deal.
I assume the way it works is that the offshore money earns interest tax free and the tax advantages generate a sufficient margin to make the higher gearing work. As less real money is paid into the deal any capital appreciation in the property generates an abnormally high rate of return on the investment. The offshore money does not come onshore to suffer tax deductions and the onshore deal is self contained - the offshore money only comes into the deal if there is a default on repayment of the debt.
Of course this only works if the money is offshore but it might be possible to do something by borrowing in Euros secured against the cash. UK interest rates being higher than continental ones should provide a margin if you can handle the exchange rate risk. That can get complicated as it means using swaps and hedging.
Don't know if this would help but it might be worth talking to corporate finance at one of the banks to see if they can structure a deal.
ysnnim said:
More info please?
I have an amount of money which will be invested into property, but not a specific property. I wish to raise as much money as possible before spending even a single pound as I may be looking to buy a whole development rather than single units.
For tax purposes I'd prefer not to put the money into a company, and thus would need to raise the money in another way. The bank where the money is currently deposited are too conservative and would not look to lend in this way.
Any more ideas?
It ought to be possible to raise money secured against a deposit account even if the account is in another name ie corporate loan with a mortgage over a personal account. As a legal principle it is the same as giving the bank a mortgage over your house to secure a business loan. It sounds like you need the corporate finance people rather than the general business manager.
Last year I was dealing with Lloyds Bank structured finance based at Gresham Street and it sounds like you need the sort of arrangement that they can put together.
It would certainly be worth talking to them and if you want I can pass on the details of the people we met. They operate in asset finance which is a specialist division within structured finance but it was a property based deal and they would have the contacts to work out very quickly if they could do a deal for you.
On a personal level I would be interested to know if you succeed as it might offer a technique for my clients as well.
Last year I was dealing with Lloyds Bank structured finance based at Gresham Street and it sounds like you need the sort of arrangement that they can put together.
It would certainly be worth talking to them and if you want I can pass on the details of the people we met. They operate in asset finance which is a specialist division within structured finance but it was a property based deal and they would have the contacts to work out very quickly if they could do a deal for you.
On a personal level I would be interested to know if you succeed as it might offer a technique for my clients as well.
Gassing Station | Business | Top of Page | What's New | My Stuff