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Posts Tagged ‘commercial mortgage’

It may be possible to get 85% LTV on a commercial mortage!

Thursday, November 18th, 2010

As we know all banks say that they are open for business. Saying and doing are two completely different things. Following an interesting meting this AM with a well known high street bank they reckon they are open for business and could possibly do up to 85% LTV on a commercial mortgage – for the right customer. If there is anyone out there that has been fortunate enough to obtain such funding we would love to know.

In reality obtaining a commercial mortgage will be very very difficult indeed. Long gone are the days that anyone could get up to 80-85% LTV based purely on the asset value rather than their ability to repay. Nowadays the LTV is less important and the most important aspect of any deal is the quality of the tenant and the ability to repay. Therefore if we have a blue chip business making loads of cash within undoubted serviceability needs an 85% LTV commercial mortgage then they may get it. A business that is struggling obviously will not.

The main point here is that all banks and financial institutions say that they are open for business. In reality this is a complete load of whats it. However finance companies do blow hot and cold invariably dipping their toe in and out of the market. To save a load of wasted time a good commercial finance broker will be able to find  the right finance comapny pretty quickly

Purchasing A Commercial Property Via a Pension Fund?

Friday, November 12th, 2010

If you need help in releasing money from your pension to buy commercial property you should take advice from and independent financial adviser (an IFA) specialising in this area. As an independent finance broker we have been working with specialist IFAs to bring their pension funds into play to help our clients raise money to buy commercial property. Combined with a commercial mortgage this may provide the perfect funding solution.

Here are a few notes to help you decide whether this might be a good idea for you.

Type of Property

    • Freehold or leasehold is acceptable
    • The trustees own the property, the plan holders are the beneficiaries
    • The company leases the property from the pension plan trustees on normal commercial terms (supported by professional valuations)
  • If the trustees are happy to purchase the property on behalf of the scheme beneficiaries and they are able to confirm that it meets the criteria of the Inland Revenue for assets of an approved tax exempt pension plan, then they are able to use existing plan assets and mortgage to purchase the property
  • The trustees are also normally willing to consider refurbishment or renovation of the property to maintain it’s value, but this must also be approved in advance
  • It is possible to use either a Self Invested Personal Pension (SIPP) or a Small Self Administered Pension Scheme (SSAS) as the vehicle to purchase property
  • It is possible for SIPP and SSAS plan holders to pool their assets to purchase property together.  

The trustees are able to borrow up to 50% of the value of the fund (this means that where the pension fund is valued at say £150,000, the trustees can borrow a further £75,000 and purchase a property valued at £225,000).

The first stage is a feasibility check – to confirm that the pension trustees would be willing to consider the investment and then compare the advantages and disadvantages of a pension funded property purchase with a straightforward company funded property purchase


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 Limited are authorised and regulated by the Financial Conduct Authority FRN 718737).

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


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