Property Finance
Commercial Mortgages
White Rose Finance has relationships with a range of commercial mortgage providers from the high street through to very specialised merchant banks and private funding lines.
What types of commercial mortgages are available?
A commercial property mortgage is focused solely on the physical premises being funded, a bricks and mortar valuation is required to assess the open market value of the property itself. The type of property mortgage is divided by lenders into those that will be used by the borrower, and those that will be tenanted out – the former being the owner-occupier commercial mortgage and the latter, the commercial investment mortgage
What is a Commercial Mortgage?
A commercial mortgage is similar to a residential mortgage, except the collateral is security over the Freehold or long Leasehold of a commercial building or other business real estate – in general not a single residential property although residential property portfolios are common.
In addition, commercial mortgages are typically taken on by businesses instead of individual borrowers. The borrower may be a partnership, incorporated business, or limited company so assessment of the creditworthiness of the business can be more complicated than with residential mortgages.
Frequently, the mortgage is supplemented by a general obligation of the borrower or a personal guarantee from the owner(s), which makes the debt payable in full even if foreclosure on the mortgaged collateral does not satisfy the outstanding balance.
How much can i borrow?
Generally, we can arrange a commercial mortgage of up to 75% of the lower of purchase price or vacant possession value, although it is more common to have a commercial mortgage of up to 70% with the higher Loans to Value attracting a higher rate. In certain circumstances we can arrange even higher levels of loan for example, for sitting tenants buying the freehold of their business premises.
Commercial Mortgages are available on a fully amortising basis, interest-only or part capital and part interest only basis, subject to your requirements.
When assessing lending facilities, whether this as an Owner Occupier or as an Investor what is crucial is the ‘Serviceability’ of the proposed facility from the property itself.
For owner occupier’s serviceability is based on the profits of the business. For a commercial investment it will be the rent generated by the tenant – just as the rental on a buy to let determines what level of mortgage would be available so does a commercial tenants rent determine what can be borrowed on a commercial property.
What premises can we fund?
We can arrange finance for a first-time commercial investment, a recently converted mixed use property, a mortgage on the property your own business resides in, a portfolio of small value residential properties and many more “tricky cases”.
There is also wide range of standard Commercial Mortgage products that we can support including but not limited to:
- Offices, Warehouse and Industrial Premise
- Commercial Mortgages for:
- Nursing/Care Homes and Children’s Nurseries
- Pubs, clubs, hotels, restaurant, cafes as well as other types of licensed premise
- all types of Leisure Facilities – health clubs, gyms, leisure parks
- Farms, equestrian and agricultural units
- Professional Landlord Buy to Let mortgages and portfolio consolidation/equity release
- Commercial Mortgages for High Street Retail premises, semi-commercial properties, take-aways. (Please note purchases for Investment will require the property to be rented and generating an income at the time of purchase).
