Those looking to invest in commercial property will be looking to do one of two things, either to purchase the property as an investment and rent out for further commercial uses or simply use the property as a platform for their business to operate from, i.e an owner-occupier. The types of commercial property out there can be formatted into various categories in relation to what they are used for. When boiled down, the main uses for a commercial property will be retail, industrial, agricultural, mixed use or service based. Whether you are looking to invest or use as an owner-occupier, your commercial mortgage will be covering a property which falls under one of these headings.
When investing in commercial property it is important to know just how much you can borrow. At Enness, our team of expert brokers have access to an unusually large network of lenders, and in the specialist sphere, we are able to source very competitive rates for our clients. In the majority of cases, we are able to source rates of 65% loan to value (LTV) for our commercial clients. Yet in some cases, we are able to raise this to 75% LTV for owner occupier situations and theoretically achieve rates of 80% in special scenarios. Before investing, it is critical to know firstly where you are going to invest and secondly, have a detailed plan of how you intend to service the debt. Your chosen premises may have an effect on a lender’s willingness to assist. It is important to ensure a watertight plan for your commercial interests, finding the perfect location and property in which your commercial interests can thrive.
For investors, debt repayments are most often paid by the income from the property. It is therefore crucial that your commercial tenants have adequate planning in place and predicted income to pay off the loan, this will be a requisite requirement from the bank. Owner-occupiers generally service the loan repayments from the proceeds of their business. Again, it is imperative that an adequate business plan is in place to reassure the lender that you will be able to make your repayments.
Enness is adept at sourcing some of the best specialist rates available on the market. Unlike other specialist brokerages, we are not beholden to just one lender and pride ourselves on our independence- essentially this means that we are able to scour the market for the best rates. We have a wealth of experience in the commercial investment market and would be more than happy to discuss any of your commercial finance needs.
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