Financial Adviser Hertfordshire

 Commercial Mortgages

If you are looking to buy a business premises or invest in a new business venture then you want to make sure that you speak to a commercial mortgage expert.

These may be found in some of the better Independent Financial Practices and also in specialist firms.

The commercial mortgage market is very different from the residential house mortgage market with which most business people are familiar.

Interest rates and fees charged are almost always to be negotiated based on the commercial proposition.  Lenders will not commit to any definite rate until they have seen full details.  This makes it very difficult for commercial mortgage applicants because a lot of time and effort can be taken up negotiating with the wrong lender.

Financial Adviser Hertfordshire strongly recommends anyone seeking a commercial mortgage should seek expert advice.  A good commercial mortgage IFA will have excellent business relationships in place with a wide range of lenders and a detailed knowledge of their lending policies.  He or she will know exactly what information the lender will need to see and more importantly how the application can be presented in the best possible light.  Without this assistance it is very easy for a strong case to appear weak and for a higher interest rate to be offerred.  A good commercial mortgage IFA will negotiate strongly with various lenders on your behalf and ensure that you acheive the best possible deal.  This can even include your own business bankers.

Some of the main areas to consider about the commercial mortgage proposition you are putting to the lender are

• The quality of your mortgage security.  If this is the lease on a premesis the nature and term of the lease are key
• The strength of the company accounts by a number of different measures including turnover, profit, profit margin, cash flow, current levels of debt, debt cover.
• The credit history of the business
• The purpose of the borrowing
• The qualifications, experience and track record of the heads of the business
• The personal financial status of company directors
• If the company is listed on any stock exchange the performance of it's shares and any bond issues

You can utilise a commercial mortgage for a range of different business purposes – The most common being the acquisition of a new business premises. The cross section of different businesses will include:

Bed & Breakfasts - hotels and guesthouses - factories and warehouses – farms – restaurants - fast food & take-away – franchises - golf courses - leisure services - property development - offices and retail outlets.

It is still possible to arrange commercial mortgages on competitive terms, even if you or your company has experienced credit problems in the past. It is possible to apply for a bad credit commercial mortgage for those individuals or companies who have had credit problems such as county court judgements, defaults and mortgage arrears. This type of mortgage is usually referred to as a sub-prime commercial mortgage.