Commercial finance would be secured on commercial or semi-commercial properties in the same manner as a standard residential property loan, normally arranged within the same timeframe. The number of uses is also varied, but as commercial finance is not regulated by the FCA, additional funding reasons are allowable, provided the use is fully legal.
What is commercial finance?
Commercial Finance is any loan secured on property which is not your residence. This can be either owner-occupied or buyer investment.
This type of finance relates to securing capital against a property which is used for commercial purposes such as a shop or office. Historically this long term funding would be sourced with traditional high street lenders. Their appetite for this market has become very limited since the financial breakdown in 2007/2008. Commercial Property prices took a bigger hit than residential and as a result there are fewer lenders in this marketplace. This has left many commercial property owners deprived of support and finance options.
Challenger Banks have stepped up to support this marketplace and as Whole of Market Commercial Finance Broker we are able to offer good interest rates to many of our commercial Customers.
The main kinds of commercial finance fall into two categories;
- Owner Occupied: This is where an individual owns the property in which they have a commercial offering. Such as a shop, factory or garage. The owner repays the loan through the profitable return of the business.
- Buyer Investment: This is where the individual owns the property as an investment but does not run the commercial element of it. Such as an office block which local businesses lease from the owner or perhaps a building which offers residential flats. The individual simply receives revenue from the property as rental/lease payments.
It is important to note that any finance raised in either of the scenarios above would only be related to the bricks and mortar of the property. The profitability of the going concern is not taken into account as a lender can only take security for a physical building.
As a whole of market broker we do not source just any deal, we fully assess the client’s specific needs and arrange the very best deal to meet their commercial objectives and strive to offer more favourable terms than the client’s own bank.
We have always had a strong understanding of the individual policies and lending criteria of each investor we work with, which puts us in the enviable position of being able to secure reliable funding solutions in line with the specific needs of the applicant and those of the actual lender. When processing an application for finance, we always know exactly who to approach in order to get the best deal with the most beneficial terms.
Many of the funding solutions we are able to provide are quite simply unavailable through mainstream lending channels, or even through competing brokers offering similar services. Owing to the inimitable way in which we work, our clients always enjoy the most competitive rates and a time-sensitive, streamlined borrowing experience that satisfies all of their needs in one convenient package.
Why choose commercial finance?
If you had a commercial property that you wanted to convert into a residential property i.e. an office block into a set of flats then you could get commercial finance secured against the property to either fund the purchase and conversion or if the property is already owned, just to fund the conversion.
Commercial finance is used for numerous reasons such as: releasing equity for debt consolidation, business cash flow injection, building improvement or to purchase more new properties.
Commercial finance for commercial property transactions
As well as being a useful alternative for those in search of business loans, commercial finance can also be used for a wide range of commercial property transactions.
Refurbishments, property acquisitions, Buy to Let auction purchases, refinancing and capital release are just a few instances where commercial finance can prove to be worth their weight in gold. As one of the UK’s leading commercial finance providers, we have sourced a wide range of time-sensitive solutions to a diverse range of financial situations whilst offering a level of client satisfaction that is quite simply unequalled.
Borrowing against commercial property
A borrower can typically have a loan for commercial property that is up to 75% of the property value.
Commercial loan repayments:
- Interest Only: As the term suggests payments simply cover the interest generated by the loan each month.
- Repayment Basis: All repayments include interest on the loan and an amount of the loan each month.
We pride ourselves on listening to our customer’s needs and matching them to our lenders criteria helping deliver their specific lending criteria. We have good relationships with our lenders ensuring you get the best deal possible.
Our “whole of market” offerings are directly authorised by the FCA and our broker status allows us to source funds from any lender offering competitive commercial loan rates in the UK.