Commercial Property: Restaurants, Cafes, Takeaways
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0845 108 0505
Commercial Property: Restaurants, Cafes, Takeaways
Commercial mortgages for shops or retail outlets are a relatively straightforward proposition provided the underlying asset the business itself has the ability to generate a steady income.
When taking out a residential mortgage loan, the lender would be looking at the ability to pay, but with a commercial property, the most important issue for the lender will be the net operating profit. The net operating profit must take into account all ongoing running expenses such as staff costs, utilities and telephone charges, tax and the cost of buying stock.
Obviously, profits will change from year to year, but the lender will want to see that there is enough comfort margin so that paying the money back is not too much of a struggle. Generally it is possible to borrow up to 75% LTV (loan-to-value) on a commercial freehold property. However this may be increased if there is a possibility of renting out additional space or sub-letting any part of the property, although there may also be restrictions preventing this. A solicitor can check carefully for any stipulations that may apply.
It often makes sense to buy the property required for the business rather than spend the money on rent, particularly if the building needs work or repairs before it can be used. The business will then also have an asset which will hopefully increase in value.
If you are looking to borrow money for any type of property for any purpose, please complete a Mortgage Enquiry Form and we will arrange for one of our specialist mortgage advisers to contact you.
Alternatively, you can call us on 0845 108 0505.
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