Financing of a retirement home – CHF 4’250’000

PrestaFlex financed a nursing home in the Oberland region through a first mortgage loan

During the Covid-19 pandemic, the Swiss economy was particularly affected. Several companies and businesses encountered problems in financing their projects and activities. In the Oberland region, a nursing home contacted PrestaFlex for a mortgage loan. The facility was having difficulty obtaining a commercial financing that corresponded to its expectations from its local bank, i.e., a large amount with little amortization, an attractive interest rate and maximum liquidity for other similar transactions.

PrestaFlex first had to proceed with a loan repurchase, not without effort

The main difficulty encountered was to find a bank that would accept the repurchase of the outstanding credit from the small local bank of the retirement facility, a challenge linked to the instability caused by the Covid-19 virus. Nevertheless, thanks to its flexibility and its numerous partners, PrestaFlex found a solution that met the expectations of the retirement home. On top of that, the transaction was finalized in only 2 months.

The loan was structured as follows:

By buying back the current mortgage loan, PrestaFlex changed the Bank, which allowed the retirement home to obtain a better interest rate: 1.6%.

1) CHF 3’500’000 came from a mortgage loan secured by a first-ranking mortgage with a small amortization amount according to the client’s wishes, which allows to keep as much cash as possible

2) CHF 300’000 was obtained through a current account limit secured by a first mortgage

3) CHF 450’000 were paid through an investment loan with a monthly payment over 36 months financed by a finance company

It was possible to finance a total amount of CHF 4’250’000.

The bank recognizes the professionalism and responsiveness of PrestaFlex

We provided 90% of the documents, i.e. a complete file with a structured financial report. During our many years of experience, we have observed that the first thing a company in need of financing does is to apply to its own bank. However, 60% of the files are refused by the banking institutions. These rejections are explained by a poor structuring and presentation of the file. Thanks to PrestaFlex’s negotiation, the nursing home not only benefited from the acceptance of the file but also from a solution corresponding to its needs. The entrepreneur was satisfied and chose to trust us and to mandate us for further financial operations.

More information under : Commercial real estate financing  

Written by : Münür Aslan, CEO & Founder of PrestaFlex and Arij Kamel, Marketing Trainee, Fribourg