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Commercial Mortgage Advice / Brokers - Scotland


ollie h

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Dear helpful community ;)

 

Me and my business partner are in negotiations to buy a vacant commercial property - small office block with separate workshops near Edinburgh. We are planning to buy cash with investor funds / bridging or a mix of both. I need to organise our exit strategy to refinance onto typical commercial lending. At the moment we only have experience in residential BTL / Holiday Let, Ltd company bridging, Ltd company holiday let but are novices when it comes to lending for a commercial property. The key areas I'd initially like some advice on are:

 

  1. Minimum timescale to refinance;
  2. Typical interest rate;
  3. Typical duration of mortgage / exit fees;
  4. Is interest only an option for commercial;
  5. If property bought below market value / valuation, what needs to be done to prove market value (surveyor valuation);
  6. Difference in valuation / lending with vacant possession vs leased vs running a profitable business from;
  7. Any other info you may deem useful.

 

Any local brokers / hubbers with commercial experience, myself and my partner would be happy to meet and coffee and cake on us*!

 

Ollie

 

*Maximum 2 pieces of cake

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Hi Ollie

 

You are not going to get answers to most of your questions as the subject matter is too broad and there can be huge differences between lenders. This week I've arranged two commercial mortgages of similar amounts and one rate was 3.25% and the other at 6.89%. I'll answer the easier ones:

 

  1. Minimum timescale to refinance - Can be done the day after as no 6-month limit
  2. Typical interest rate; Pass
  3. Typical duration of mortgage / exit fees; 15 years if investment, 25-30 if occupier,10 years for interest only - can go to 30 but usually a premium for it. Exit fees 0% -1%
  4. Is interest only an option for commercial; Yes but not by the lower cost lenders
  5. If property bought below market value / valuation, what needs to be done to prove market value (surveyor valuation); Proof that you added value by refurb. Buying below value becomes the new value in 99% of cases
  6. Difference in valuation / lending with vacant possession vs leased vs running a profitable business from; Look at the VP value unless the tenant is not connected to you and is financially very strong and well known. You might call that a sweeping statement but covers most property,
  7. Any other info you may deem useful. Early repayment charges, solicitors - your own acting for both parties or yours dealing with lenders and you pay for both sets. Value of the property. It might be a lot of money to you but to lender, smaller loans are just as much work with a lower return so lenders have minimum values. Mine for example as a broker on a commercial is £150,000

If your business is tenant then rates can be lower on high street on a repayment basis. If unconnected part as a tenant then lease length important. 

 

Regards Simon

Searchlight Finance Ltd

T:01565 654005

 

Landlord and specialist property finance advisor only dealing with investors, landlords and developers throughout the UK and beyond.

Buy to Let - Commercial Finance - Bridging Loans - Development Finance - HMO Finance - Refurbishment Loans - Multi Let - Limited Company - Student Lets - Portfolio Finance

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