The commercial mortgage market is very different from domestic loans market.
Commercial mortgages are for the purchase (or re-finance) of owner-occupied commercial property, from office premises and industrial sites to retail outlets. The mortgage is usually secured against an existing business asset or assets, or it could be secured against the property you are thinking of acquiring.
There are a number of issues concerning commercial mortgages which will help you plan your approach:
What is the minimum amount you can borrow?
There is usually no maximum, but minimum figures of £100,000 are not uncommon.
What percentage of loan to value is offered?
100% mortgages are not usually available on commercial property. Often 80% of the property value is the most you can expect.
What time period is involved for the repayment of the loan, and how is the repayment structured?
It pays to ask about the possibility of capital repayment holidays in the first few years.
What interest rates will be operative?
The usual Fixed or Variable options will be available. Or you may be able to benefit from a Managed rate, which allows interest to rise and fall within an agreed band.
What fees are payable to the lender?
Arrangement fees could be 1% of your loan value, which could add up to a sizeable amount if you're thinking of buying city centre premises or large industrial units.
Are there any other costs to consider?
Remember that as a borrower you may be responsible for various legal, surveying and valuation costs. Don't forget to ask about brokerage fees, too. Most lenders will do everything possible to help you reach your objectives, but you must be able to prove you can service loan repayments.
What if my company has a bad credit history?
Bad credit in the past doesn't necessarily preclude you from raising new finance. But you may find certain restrictions, such as a limit placed on the loan to value percentage. For those with unpaid debts or CCJs, mortgages can be more complicated to arrange and therefore more costly.
What if I'm self-employed, or starting up in business?
Self-employed people (with or without accounts), new businesses and those with complex credit requirements will not find themselves out in the cold. There are lenders who specialise in just about every area of business development. You just need to find the right lender and start a dialogue.
Can I get a commercial mortgage quote without obligation?
Certainly - the best starting point is to talk to us at Endsleigh Financial Independent Tailoring. We'll do the searching for you.
Fees - We do not charge a fee for advising on Pure Protection policies, however for some services we offer you the choice of whether you pay us a fee or whether we are paid by commission. There is no additional charge made for dealing with us by telephone.
Related links.
Mortgages
Remortgages
First time buyers
Fixed rate mortgages
Flexible mortgages
Tracker mortgages
Offset mortgages
Interest only
Key worker mortgages
Lifetime mortgages
Non standard mortgages
Right to buy mortgages
Bad credit mortgages
Commercial mortgages
Buy to let mortgages
Mortgage guide
Mortgage FAQ’s
Your home may be repossessed if you do not keep up repayments on your mortgage.
Endsleigh Independent Financial Services Limited is authorised and regulated by the Financial Services Authority. This can be checked on the FSA Register by visiting its website at www.fsa.gov.uk.