Commercial Property Finance
In simple terms, Commercial Property Finance is funding designed especially for businesses looking to develop or invest in property. Throughout the recovery, small businesses, in particular, have been struggling to regain the momentum they once had. As a result, many are reaching out for property finance to help them get back on their feet. This form of finance tends to be quite complex and time consuming which can cause frustration for business owners, whose main objective is the successful running of their business.
To add insult to injury, commercial lenders are now much more restrictive with whom they will lend to; unfortunately, it could be said that a significnt number of lenders will assume a small business to be failing if it is applying for a financial assistance. As a result banks are now restricting loans to around 60% Loan to Value (LTV) and require you to present a long list of business documents to prove your business is a ‘trustworthy’ borrower. These include the accounts for the last 2 to 3 years of business, profit and loss forecast predictions for the next few years, your general current business performance and the personal details of the business owner(s) for credit checking. Additionally, asset and liability statements for both the business and each applicant will be required and your proposed business plans will have to be clearly marked out in detail highlighting how the property will contribute to your cash flow.
In saying this though, the main concern of any commercial lender is whether or not you can prove that your business will be able to meet the repayment terms of the loan. A borrower is usually given the choice of two repayment terms, depending on their personal circumstance. A Repayment Mortgage Option is available which requires the borrower to repay the capital and interest back each month. If this is not suitable for the development plan, there is an Interest Only Mortgage option, through which only the interest on the amount borrowed is repaid each month. Repayment contracts are generally short term, around 12 to 24 months and all forms of commercial property finance are secured against property, usually the business premises itself. Therefore, like with home mortgages, your business premises will be at risk if you are unable to keep up with the repayments.
Despite these hurdles, commercial property finance can be extremely rewarding in the long term, enabling your business to successfully grow within the ever competitive market. There are various forms of property finance available for your business, depending upon the particular circumstance. These include Commercial and Residential Investment, Commercial and Residential Development and Mezzanine Finance. The latter is a particularly popular form of finance used for management buyouts (MBO) and management buy-ins (MBI).
So, obtaining commercial property finance is certainly not a decision to take lightly. However, with a little help, it could be the most rewarding decision of your working life. It’s probably about time you started to reap the fruits of your labour!
Commercial Property Finance
In simple terms, Commercial Property Finance is funding designed especially for businesses looking to develop or invest in property. Throughout the so-called ‘recovery’ of the recession, small businesses, in particular, have been struggling to regain the momentum they once had. As a result, many are reaching out for property finance to help them get back on their feet. This form of finance tends to be quite complex and time consuming which can cause frustration for business owners, whose main objective is the successful running of their business.
To add insult to injury, commercial lenders are now much more restrictive with whom they will lend to; unfortunately, most lenders will assume a small business to be failing if it is applying for a financial assistance. As a result banks are now restricting loans to around 60% Loan to Value (LTV) and now require you to present a long list of business documents to prove your business is a ‘trustworthy’ borrower. These include the accounts for the last 2 to 3 years of business, profit and loss forecast predictions for the next few years, your general current business performance and the personal details of the business owner(s) for credit checking. Additionally, asset and liability statements for both the business and each applicant will be required and your proposed business plans will have to be clearly marked out in detail highlighting how the property will contribute to your cash flow.
In saying this though, the main concern of any commercial lender is whether or not you can prove that your business will be able to meet the repayment terms of the loan. A borrower is usually given the choice of two repayment terms, depending on their personal circumstance. A Repayment Mortgage Option is available which requires the borrower to repay the capital and interest back each month. If this is not suitable for the development plan, there is an Interest Only Mortgage option, through which only the interest on the amount borrowed is repaid each month. Repayment contracts are generally short term, around 12 to 24 months and all forms of commercial property finance are secured against property, usually the business premises itself. Therefore, like with home mortgages, your business premises will be at risk if you are unable to keep up with the repayments.
Despite such hurdles as those me
Commercial Property Finance
In simple terms, Commercial Property Finance is funding designed especially for businesses looking to develop or invest in property. Throughout the so-called ‘recovery’ of the recession, small businesses, in particular, have been struggling to regain the momentum they once had. As a result, many are reaching out for property finance to help them get back on their feet. This form of finance tends to be quite complex and time consuming which can cause frustration for business owners, whose main objective is the successful running of their business.
To add insult to injury, commercial lenders are now much more restrictive with whom they will lend to; unfortunately, most lenders will assume a small business to be failing if it is applying for a financial assistance. As a result banks are now restricting loans to around 60% Loan to Value (LTV) and now require you to present a long list of business documents to prove your business is a ‘trustworthy’ borrower. These include the accounts for the last 2 to 3 years of business, profit and loss forecast predictions for the next few years, your general current business performance and the personal details of the business owner(s) for credit checking. Additionally, asset and liability statements for both the business and each applicant will be required and your proposed business plans will have to be clearly marked out in detail highlighting how the property will contribute to your cash flow.
In saying this though, the main concern of any commercial lender is whether or not you can prove that your business will be able to meet the repayment terms of the loan. A borrower is usually given the choice of two repayment terms, depending on their personal circumstance. A Repayment Mortgage Option is available which requires the borrower to repay the capital and interest back each month. If this is not suitable for the development plan, there is an Interest Only Mortgage option, through which only the interest on the amount borrowed is repaid each month. Repayment contracts are generally short term, around 12 to 24 months and all forms of commercial property finance are secured against property, usually the business premises itself. Therefore, like with home mortgages, your business premises will be at risk if you are unable to keep up with the repayments.
Despite such hurdles as those mentioned above, commercial property finance can be extremely rewarding in the long term, enabling your business to successfully grow within the ever competitive market. There are various forms of property finance available for your business, depending upon the particular circumstance. These include Commercial and Residential Investment, Commercial and Residential Development and Mezzanine Finance. The latter is a particularly popular form of finance used for management buyouts (MBO) and management buy-ins (MBI).
So, obtaining commercial property finance is certainly not a decision to take lightly. However, with a little help, it could be the most rewarding decision of your working life. It’s probably about time you started to reap the fruits of your labour!
ntioned above, commercial property finance can be extremely rewarding in the long term, enabling your business to successfully grow within the ever competitive market. There are various forms of property finance available for your business, depending upon the particular circumstance. These include Commercial and Residential Investment, Commercial and Residential Development and Mezzanine Finance. The latter is a particularly popular form of finance used for management buyouts (MBO) and management buy-ins (MBI).
So, obtaining commercial property finance is certainly not a decision to take lightly. However, with a little help, it could be the most rewarding decision of your working life. It’s probably about time you started to reap the fruits of your labour!
