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. Our team of specialist brokers can help you source both.
Commercial investment mortgages are specifically designed for individuals or businesses looking to purchase a property as a business asset, in order to profit from rent and property value appreciation.
Some of the more lucrative commercial investments include shopping centres, industrial estates, agricultural land and office buildings. From a lender’s 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 on any loans, which gives the bank permission to go after the borrower’s personal assets if the business fails to pay back the loan.
Rates for business mortgages 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 although be prepared to move your business banking to achieve the best terms available.
Commercial mortgages from more specialist lenders tend to be priced higher, but they won’t want your business banking.
Commercial mortgages are typically set at an interest rate just above the Bank of England’s, and loans are generally available for up to 75% Loan-To-Value, so expect to provide 25% of the amount.
Loans can be structured in many different ways: onshore, offshore, company name, LLP, or trust. Funding is available from £500,000 to upwards of £100 million, dependent on the project. Here at Coreco, we 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 then please call 020 7220 5100 or click here for more contact options.