Although the most commonly used form of property finance is that of a mortgage, many other options exist. Depending on your circumstances and requirements, it may be possible to arrange mezzanine or bridging loans, short-term or long-term mortgages, or secured loans.
Call us today to speak to one of our expert team of commercial financing experts. They will determine your requirements, discuss your best funding options, and help to arrange the finance your business needs in order to grow.
On average loan to value will be in the region of 70% in some instances there are lenders that will go beyond that, with terms of up to 30 years. Affordability checks are conducted, and are based on the financial performance and history of your business. Although it is possible, it will be more difficult to find a commercial mortgage if you have limited or no trading history.
If the property is being purchased as an investment and not for trading the amount of funding is generally based on the amount of rental income that the property generates.
If the deposit of 30% is an issue there are alternative ways of raising that either by unsecured loans or utilising the value in other assets.
A bridge loan is a type of short-term loan, typically taken out for a period of one month to 18 months, in some instances 24 months, pending the arrangement of larger or longer-term finance or sale of an asset, proceeds of which are then used to repay the bridge.
Bridge loans are typically more expensive than conventional financing, to compensate for the additional risk. Bridge loans typically have a higher interest rate, and other costs that are amortized over a shorter period, and various fees.
They are however typically arranged quickly with relatively little documentation.
Development finance is used by property developers to fund a wide variety of building projects, brand new single residential properties, large housing estates, industrial units, offices, apartment blocks, factories and hotels. It can also be used for major refurbishment and conversion of properties.
A development loan is a short term funding option, with repayment coming from either sale of the completed project or by refinance.
A lender will lend up to initially 70% of the value of the land and also provide the build costs (which can be up to 100%. The lender is interested in how much the land is worth before construction begins and what the total building costs will be together with any other associated costs. Then most importantly they want to know what the property development will be worth once it is finished. This is known as the Gross Development Value or GDV. Payments from the lender are usually made in stages and against work completed, usually prearranged with the borrower.
At A2B Finance we can arrange commercial mortgages and loans, as well as other forms of commercial financing. We help ensure that you get the best product for your circumstances, and that you get favourable results on your loans. Contact us today and speak to a commercial finance specialist to start the process of buying your next property.