A commercial mortgage operates in much the same way as a normal mortgage with funding secured against a first legal charge over the property/lease* in favour of the lender.
Depending upon the business sector** in which the company trades and its ability to service the required repayments then a business can borrow up to 80%** of the value of the premises over a term of up to 30 years. Interest rates will vary and more often than not are linked to the level of funding and strength of the business. Generally there is the option for the business to choose between applying either a fixed or variable rate of interest to the mortgage loan. This option will depend to a large extent on risk profile the business directors and how comfortable the lender is with that profile.
A business can borrow against many types of property be it an office, factory, hotel, restaurant. Even if you are considering refinancing an existing borrowing facility Cranfield can assist.
So who can benefit from a Commercial Mortgage?
- Businesses looking to relocate;
- Businesses that lease their existing premises and are now seeking to acquire their own;
- Those seeking to acquire a business that include property such as a Public House or Restaurant;
- In Management Buy Out (MBO) situations where a property may form part of the assets of the target company, a commercial mortgage may assist in raising funds to assist in the acquisition;
- Those raising funds for a specific business purpose e.g. to investment in new equipment or additional staff.
The search for the right financial solution begins & ends with Cranfield, so contact us today.
* Long Term Leasehold – With long leasehold premises it may be possible to arrange a mortgage providing the lease term exceeds 55 years. However there needs to be a minimum unexpired term of 40 years remaining upon maturity of the loan.
** If you’re a Medical Professional then you can potentially borrow up to 100% of the value of the premises at competitive rates.