All types of business premises can be considered, including:
Properties are occupied by the business (borrower) which is a term known as owner occupier
Mortgages can be for a single property, or multiple properties if the business trades from multiple locations.
Mortgages are available for refinancing or for purchasing new and additional properties. When refinancing, we can consider Equity Release which would provide an injection of cash into the business.
Affordability & Repayment
Affordability is based on the trading performance of the Company. Profitability and cash generation are both important factors in establishing affordability. When a business is renting a property, the rent paid can often be considered towards the mortgage payments when purchasing the property. In many cases, the monthly mortgage commitment can be similar to the rent currently paid, offering an affordable pathway to ownership.
Ownership Structures: OPCO / PROPCO
OPCO PROPCO – this is a term used to describe a situation where a business acquires its trading premises using a special purchase vehicle (SPV). Typically this would be a separate entity/Company that has been created only for the purposes of owning the property, outside of the trading business. This is widely accepted as the norm.
Loan Terms & Lending Criteria
Loans are capped at 75% loan to value (LTV), however many banks will only go to 60% or 65%. Long term interest only repayment structures are not available, however most lenders will consider a period of up to 2 years interest only at the start of a loan.
Pricing & Fees
Pricing of these facilities can vary greatly, and it is often linked to the loan to value (LTV), loan amount, and credit quality of the business.
Fixed rates are available. Arrangement fees are in the range of 0-2% of the loan amount which can be added to the facility.
