Buy-to-let & Commercial
Commercial Owner Occupier
What is a commercial owner occupier?
This is when an individual or business runs a business or trades from a building they own. Commercial owner occupier mortgages are available for individuals (sole traders), partnerships, limited companies or limited liability partnerships.
Lenders will consider applications form a wide range of industries, including but not limited to:
Holiday lets, Hotels and guest houses, Health clubs, Pubs and restaurants, and Schools and care homes.
There are several situations where a commercial owner occupier may need finance:
If you wish to buy a ‘trading business’ and a freehold for the first time, you might be purchasing new freehold premises for your existing business to operate from, or you could be looking to remortgage your existing commercial property to get better terms or raise capital.
How much can I borrow?
- Business profitability.
- Multiples of the reconstituted net profit.
- Lending against the goodwill of a business. Goodwill is the assumed value given to a trading business. It’s based on its attractive force to generate its sales.
- The ability to lend with supporting security in lieu of cash deposit.
What ‘income’ do the lenders consider?
What is the maximum LTV I could achieve?
Lenders can lend up to 75% of the property value, particularly if this is a preferred sector of the bank’s policy.
In certain circumstances lenders may consider lending move or taking additional tangible security. For example, a second charge over the clients private dwelling or a second legal charge over an investment property.
What sort of rates are expected?
Market leading commercial rates are available for the banks’ favoured sectors. These are sectors that have historically well for banks and are therefore considered low risk. For example a doctor’s surgery, dentist surgery, accountant’s office, pharmacist or solicitors. For sectors considered more volatile the rates will increase. This includes sectors such as: retail, leisure, shops, pubs and restaurants.
What documents are required?
- Copies of 6 months of personal and business bank statements
- The last 3 years of accounts and management information
- The last 4 VAT returns
- Details of any other assets and liabilities held by the directors – we can provide a template to assist