Commercial Mortagages Lending

Discussion in 'General Business Forum' started by Czandmarms, Jan 14, 2019 at 12:08 PM.

  1. Czandmarms

    Czandmarms UKBF Newcomer Free Member

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    Hi,

    Myself and my wife are currently reviewing the possibility of a lifestyle change.

    We are preparing a business plan for the purchase of a House, Cottage and camping land for a possible lifestyle business. Businesses we have reviewed so far generally have a turnover of around 60-70k with scope to expand.

    As I understand it, because the house, cottage and land is all part of the same freehold, we would purchase all with a commercial mortgage.

    Having researched some commercial mortgages I understand that the lending criteria is tighter. particularly with experience in the given industry. Although we do not have experience within this industry, we do both have retail project management experience.

    What are the average LTV's offered? we have around 20%, are there viable lenders out there? How stringent is the criteria, we are confident we have a business plan that can deliver and equally there is the option to contract to supplement the income especially during the off season.

    Any advice in terms of taking the first steps would be gratefully received

    Many thanks,
     
    Posted: Jan 14, 2019 at 12:08 PM By: Czandmarms Member since: Nov 7, 2018
    #1
  2. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Enthusiast Free Member

    993 250
    There are different conditions depending on what percentage of the land/property is to be lived on by you, and what percentage is true commercial.

    It can be tight, but there is generally something to be done in most circumstances.

    As a guide, your LTV would probably be maximum 75%. The value of the business is unlikely to be considered in calculations, it would be about lending on the property.

    That's a good guide for the stage you're at currently. Next step would be saving up just a wee bit more cash to get together that full deposit I suppose.
     
    Posted: Jan 14, 2019 at 1:05 PM By: Gordon - Commercial Finance Member since: Jun 26, 2017
    #2
  3. Czandmarms

    Czandmarms UKBF Newcomer Free Member

    2 0
    Thanks for the information Gordon. Ultimately, should we be able to increase the LTV by 5% then we will find something?

    Are there any specific lenders we should look at in our circumstances? Anything we can do to boost our chances? If they're looking at property rather than the business, I assume the business plan and previous accounts won't sway it?
     
    Posted: Jan 14, 2019 at 1:16 PM By: Czandmarms Member since: Nov 7, 2018
    #3
  4. Gordon - Commercial Finance

    Gordon - Commercial Finance UKBF Enthusiast Free Member

    993 250
    Business accounts unlikely to sway it I wouldn't think, but like I said it depends on the product.

    Best thing you could do is get in touch with a broker - I'm not just saying that because I'm a broker, as it happens this isn't something I would do - this will mean access to the full lending market rather than trying to identify specific lenders.

    Although this isn't something I would do, I can recommend a broker if you PM me.
     
    Posted: Jan 14, 2019 at 1:26 PM By: Gordon - Commercial Finance Member since: Jun 26, 2017
    #4