The Situation
The client, a single entrepreneur with excellent credit, had built a meal-prep and healthy-catering business over eight years, serving the Lower Mainland from leased premises. The landlord decided to demolish and rebuild, a project of several years, and the lease was ending almost immediately. The client had saved steadily and judged it the right time to own rather than rent.
The Challenge
A commercial purchase on a deadline, by a business that had never owned property, with the loan to sit in a holding company. The income was real but lived in the company's bank account rather than on a personal tax return. The property's two tenants had leases ending in about two years, and the space the business needed was the vacant lower floor, so the lender had to be comfortable with an owner-user taking part of the building and tenants covering the rest.
The Solution
We placed a commercial mortgage with an alternative lender's commercial program at 75% loan-to-value on a 25-year amortization. The business's income was documented from twelve months of bank statements, about $606,000 gross with 40% deducted for expenses, alongside the rent from the two tenants. The holding company, owned entirely by the client, took title; the client's personal covenant and more than $1.2 million in savings and investments stood behind it. The 25% down payment came from business and personal savings.
The Outcome
The business moved into its own building on completion, with two tenants helping to carry the mortgage. A landlord's demolition became the moment the company stopped paying rent to someone else, and the holding-company structure keeps the real estate separate from the operating business for whatever comes next.