At Veracity Financial Planning, we work with the whole of market, meaning we aren’t restricted to the lenders that we can use. This allows us to find the best deals on the market for our clients.
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Commercial Owner-Occupied mortgages – Where the applicant secures finance on the commercial premises, they will be running their own business.
Commercial Investment mortgages – Where the applicant rents the commercial premises, they will be securing finance.
There are lenders that will solely lend to one type and some that will lend to both. We work with a network of over 500 lenders and are able to help our clients find the most appropriate lender for them based on their unique circumstances at the best rates and terms on the market.
Each lender will have their own method of calculating the exact amount you would be able to borrow, but this is usually based on an assessment of you, your firm and your loan objectives.
Many lenders offer bespoke deals on commercial business over £1 million which is tailored to you and your objectives, but overall, the loan amount will be dependent on earnings before interest, tax, depreciation and amortisation or EBITDA. Essentially evidence that your business can cover the mortgage and interest payments. If there isn’t sufficient profit to cover this, then some lenders may allow you to declare other legal forms of income that they can then include in the affordability calculation.
Lenders will want to see that there is going to be demand in the future for your business’ product or service, that it turns a good profit and that it has a good track record of income from previous years as well as an appropriate reason for owning a commercial property.
If you are purchasing the property to rent out then they will want to see that the monthly rental payments will provide around 100%-155% coverage, although some may require less with a lower loan to value.
In most cases, commercial lenders will ask for a 25-40% deposit although it may be possible to get up to 100% loan to value (LTV) with some lenders if you are able to put down additional security, such as other properties with enough equity in them or assets that hold their high value.
As always, the higher the deposit you intend to put down the better your chances are of being able to secure the mortgage you want and potentially securing more favourable interest rates.
The list of commercial properties that you could potentially get finance on is endless, here are a couple of example properties which could be used on either a investment or owner-occupied basis:
If you have a property in mind and are unsure if you could finance, then contact us and we will let you know if we can help you.
The process of refinancing your commercial property works in the same way that arranging a new commercial mortgage would. You may be able to release some equity from the security to fund a new investment or business project.
Fixed and variable rates are available, your broker will be able to discuss the different options with you and will help you understand what makes the most sense for you and your business. In the same way that they would for a residential mortgage, you would be required to make monthly repayments to your lender which would be covered by the income generated from the business or from the rent that you receive – depending on if you have bought the property as a rental or for your own business.
Commercial mortgages can be arranged for short term loans or longer terms. Most tend to run for 5-10 years but we can source deals ranging from 12 months up to 35 years to fit your specific situation. In some cases when short term finance is needed a commercial bridging loan may be used, your adviser will assist you to find the most appropriate type of lending for your unique circumstances
Here at Veracity, we can secure finance for most scenarios, including commercial, regulated and unregulated bridging loans, high-value residential mortgages and Buy to let mortgages and Development Finance. We have an unrestricted network of high-street, specialist and private lenders who can offer our clients the best deals on the market.
We will negotiate terms and rates for your finance needs, in some cases, lenders will offer us bespoke deals for our clients depending on the type of deal and the individual’s circumstances. Our advisers will work with you to find the most appropriate deals and explain to you any potential risks involved as well as the benefits.
Your adviser will work on your behalf to submit any necessary paperwork needed to apply for the chosen deal and ensure any of your questions are answered in a timely manner.
We aim to offer simplified, sensible and valuable advice with clear and transparent fees available to see on our website. Our aim is to ensure that you understand what our advice looks like and what it costs before you contact us for further information.