Commercial Finance

Commercial Mortgages can used for the following: Farms Pubs, restaurants, night clubs, take-away units Shops, shops with living accommodation Hotels, guest houses, B&B's, holiday lets Industrial units, factories, offices, warehouses. Taking out a Commercial Mortgage on a property might be the best way for you to get your hands on your next business venture. The project could be purchasing a brand new building or buying land. It’s fairly complex entering the world of the business finance but with a broker working on your behalf the entire process is sure to be easier. Problems like no proof of income, county court judgments or a poor credit history will become problems of the past because there are Self Cert Commercial Mortgage packages covering up to 85% of the property`s value.
It can be very difficult to obtain the most suitable mortgage for your business circumstances without an excellent knowledge of the market and good relationships with the lenders. A mortgage can be taken out to help businesses to expand, grow and improve as well as to buy new premises, buy to let or even a Re-Mortgage to raise investment capital.
The world of commercial mortgages may be appear quite daunting to the uninitiated or for those with no experience but help is at hand, the net contains a wealth of information which should go some way in alleviating any concerns you may have . The commercial mortgage marketplace has undergone a transformation over the last few years and there is now a vast range of commercial mortgage brokers and lenders to choose from.
Traditionally, most businesses approach their bank for commercial mortgages and loans but rarely do they receive service that meets all three of these needs. Just as with a residential mortgage an adverse commercial mortgage is designed for people who have had credit problems but who want to borrow money to expand their businesses. Some commercial mortgages are non recourse, that is, that in the event of default in repayment, the creditor can only seize the collateral, but has no further claim against the borrower for any remaining deficiency. Interest rates for commercial mortgages are usually higher than those for residential mortgages.

The Business Mortgage
In the 1990's commercial loans and mortgage finance was generally only obtainable via high street lenders and banks with the exception of a handful of niche lenders which created a UK business market that was quite inflexible with strict criteria. In 2002 a new commercial mortgage lender offered new underwriting criteria which would cater for not producing accounts and limited paperwork requirements or self certification.
This freed up an opportunity to many small businesses to finance business growth who previously would probably have not been able to lend through traditional banks.

Since then other new lenders have sprung up in the UK commercial mortgage market that have offered further flexible and more open minded lending criteria. For example excepting in some cases poor credit history.

Residential lending rates are generally set in advance however commercial lending rates can vary according to the individual circumstances of the business and business owner. Commercial lending is generally more complex and involved than standard residential lending.

Looking at payment history, experience, accounts, the business plan and projections. Generally speaking the better and more healthy a business has been and potentially could be will encourage a lower rate as it will reduce the risk to the the lender. Remember generally only one in five businesses will still be successfully trading after five years.

However since the credit crunch many lenders have withdrawn from the market or existing lenders have tightened their underwriting criteria. Deals now have much harder conditions to meet in order to borrow.

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