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Commercial Mortgages and Bridging Finance

In the current economic climate there seems as though there are opportunities to purchase commercial property at a discount. Whether it is your landlord wanting to release some cash or a phoenix business buying a property off an administrator a slightly different approach to commercial mortgage lending could result in a much higher loan to vale being obtained.

The very best loan to value one can expect is 70%. However if you are buying a property at below market value most banks and mortgage companies will only advance 70% of the actual purchase price. If the valuation comes in lower they ill only advance 70% of the valuation in affect which is lower of the two.

However certain banks and commercial mortgage companies have slightly different lending criteria if the transaction is a remortgage rather than a purchase. This is where bridging finance can come in useful. A bridging company will only go to 60% of the valuation which could still be more in real terms than 70% of the purchase price. At the same time a remortgage will have been agreed with a prime funder at 60-70% of the valuation. Briding finance is expensive and so in a an ideal world you would only want to be exposed to the bridging company for a maximum of a month.

Used in the correct manor  bridging finance can be a useful tool to obtain the maximum possible loan to value against a commercial property

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XL Business Finance Ltd is a privately owned and independent business financing company with established links to many of the UK's leading finance houses. XL Business Finance provides a viable alternative to high street banks that lack the flexibility and imagination to provide a solution to most business users requirements. XL Business Finance can provide a full range of business financing solutions and we ensure a high level of customer service and pride ourselves on quick decisions. Our independent status will ensure any offer of funding and asset finance leasing is best suited to our customer’s needs.

XL Business Finance, Eaton Place Business Centre, 114 Washway Road, Sale, Cheshire M33 7RF UK.

 

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