Commercial finance is the catchall term for a range of different finance products designed specifically for businesses.
Commercial Finance is split into two distinct groups:
Full commercial – This relates to all remaining commercial premises such as offices, warehouses, pubs, factories, guest houses, GPs & Dental Surgeries, care homes
Commercial Finance is agreed depending upon the lenders confidence that the commercial property loan will be repaid without difficulties and is split in the following ways:
Owner Occupier – The borrower will utilise the security property themselves so the accounts for the business will be scrutinised by the lender to ensure the client will not struggle to make the monthly repayments.
Investment – The monthly payments on the mortgage will generally be covered by the rental payments received from the tenant.
Semi commercial – This would be shops with residential flats above – see our Semi Commercial page for more information.
Main Types of Loans
Commercial Mortgage – any premises where a business is trading from will need to be financed on a commercial mortgage. Mortgage terms tend to be between 15 years and 20 years although there are some lenders who will go to 25 years.
Lenders will not necessarily deal in all commercial areas some specialise in say retail sectors, specific business sectors (hospitality, scientific, pharma etc.), agricultural, equine and marine sectors.
Working with a broker means you can access the right lender(s) and get the best rates available given your circumstances and the property you are purchasing. We take the strain and do all the work for you. Contact us today to discuss your plans/requirements.
There are lenders who will offer 5 – 10 year terms where perhaps the mainstream lenders would not be content to lend
Bridging Finance – Whilst bridging finance is a more expensive option it can get you to where you want/need to be. Most bridge terms are over 12-18 months although there are some companies who will go to 24 months, however, by the end of the term you need to have a robust exit strategy. This needs to be either refinancing onto term debt or you will need the cash to repay the loan.