Are you looking for capital to help you purchase, remortgage or invest in commercial property?
Our expert team of advisers will be able to suggest which commercial mortgage is right for you, and how to get it.
What is a commercial mortgage?
There are two types of commercial mortgage – an owner occupier mortgage for trading premises and a commercial investment mortgage for those looking to invest in commercial property.
An owner occupier mortgage is suitable for individuals or businesses who purchase property with the intention of trading from it, while securing an asset at the same time.
Commercial investment mortgages are specifically designed for individuals or businesses looking to purchase a property as a business asset. This may be in order to profit from rent and property value appreciation.
When can I use a commercial mortgage?
Some of the more lucrative commercial investments include shopping centres, industrial estates, agricultural land and office buildings.
Who can get a commercial mortgage?
From a lenders point of view, there are two key factors to consider:
- The calibre of the tenant – This determines the yield and thus the value of the asset.
- The borrower’s security– Lenders will usually insist on a signed personal guarantee when an any individual/company secures a loan. This gives the bank access to the borrower’s personal assets if the business fails to pay back the loan.
What are the commercial mortgages rates?
Commercial mortgage rates are dependent on experience, track record, industry sector and the strength and performance of your business, or the business, you are considering.
Competitive terms are available for business owners, but be prepared. You might be able to achieve better terms if you move your business banking to the same provider that you borrow from. On the other hand, commercial mortgages from specialist lenders tend to be priced a little higher, but they may not want your business banking.
Commercial mortgages are typically set at an interest rate above the Bank of England’s. Generally, loans are available for up to 75% Loan to Value (LTV), so expect to provide a minimum of 25% of the property value, and funding is available from £500,000 to upwards of £100 million dependent on the project.
How to get a commercial mortgage
Loans can be structured in many different ways including onshore, offshore, company name, LLP, or trust. Here at Coreco our expert team of experienced advisers are very comfortable handling large development schemes – it’s one of our specialist areas.
If you would like to speak to a consultant specialising in commercial mortgages, we’re on hand to help. Call 020 7220 5100 or click here for more contact options.