Historically, if you needed business finance your options didn’t stretch much beyond your high street bank – and if your credit history was less than perfect any proposal was probably sunk at the outset.
The commercial finance arena has seen considerable expansion and the competition that derives from a wider choice of lenders has lead to more innovative products that cater for new start-ups as well as firmly established businesses.
No commercial lender is going to lend on a whim but considerable flexibility now exists around credit history, availability of accounts and experience in the proposed business - the term ‘entrepreneur’ wouldn’t feature so regularly in our vocabulary if lines of finance didn’t exist to get them started. A realistic, well thought out business plan and cash-flow forecast go a long way in helping to secure the required funding.
Broadly, the following appraisals are made by commercial lenders – a proposal not meeting all requirements may still be financed on slightly higher rates.
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Your personal and business credit history.
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The amount of deposit you are able to put down.
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The size of loan required, and it’s proportion to:
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The value of the security being offered.
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The type of security, i.e. freehold or leasehold.
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Your experience in the business proposed, and if trading:
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Business accounts to support application.
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Business plan & cash-flow forecast.
Commercial Products – General Guide
| Prime Owner Occupied |
Available for applicants with full accounts available to assist with the purchase or refinance of their own business premises. |
| Development Finance |
Available for all types of commercial development, from purchase and conversion, single property build or multiple property developments. |
| Near Prime Owner Occupied |
Available for applicants with limited accounts available to assist with the purchase or refinance of their own business premises. |
| Prime Commercial Investment Property |
Available to applicants purchasing commercial investment property with a current tenant and acceptable lease already in place. |
| Professional Practice Loans |
Available to Doctors, Dentists, Vets, Solicitors and Accountants for the purchase or refinance of their own business premises. |
| Sub Prime Commercial Investment |
Available to applicants purchasing commercial investment property with either a limited term left on the lease or no current lease in place. |
| Sub Prime Owner Occupied |
Available for applicants with no accounts available or an adverse credit history to assist with the purchase or refinance of their own business premises. |
Key Features
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85% LTV (100% on Prime with additional security)
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No accounts required
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Interest only periods
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Adverse credit history
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New start-ups
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Fixed or Variable interest rates
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48 Hour Decision (subject to lender valuation)
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No Early Repayment Charge (on some schemes)
Be aware that commercial propositions carry greater fees / costs implications.
For example, with leaseholds the purchaser is often liable for the vendor’s legal costs in addition to his own, whilst the lease itself may contain onerous repair and maintenance conditions. We recommend that clients engage commercial solicitors to handle commercial conveyancing.
A lender’s valuation will be required.
Lender Administration Fees will generally be based on the loan amount, i.e. 1.5%
Please note that commercial mortgages are referred to preferred suppliers and Mortgage of Choice is not responsible for their advice. As regulated mortgage brokers we hold as paramount the interests of our customers and seek to provide them with access to as broad a range of lenders as possible. Commercial mortgages are not regulated by the Financial Services Authority.
CAN WE HELP TO FIND THE COMMERCIAL SOLUTION THAT’S RIGHT FOR YOU?
0800 988 1889 enquiries@mortgageofchoice.co.ukEnquiry Form
Commercial Mortgages are not regulated by the Financial Services Authority.
Your home may be repossessed if you do not keep up repayments on your mortgage.
John Morgan trading as Mortgage of Choice is an Appointed Representative of Home of Choice Ltd which is authorised and regulated by the Financial Services Authority. Register No.302967 http://www.fsa.gov.uk/register/