Commercial mortgage for start-up children’s day nursery

We were approached by two very experienced children’s day nursery managers looking for finance to purchase a former local authority day care centre so that they start their own nursery.

This case was challenging to place because it was a start-up business, so there were no accounts to support the application or income to service the mortgage until the nursery was operational.

We approached a high street lender and after considerable negotiation terms were agreed because the clients:

• Had chosen a property that was in good repair and a suitable location.

• Were seeking a relatively low loan to value

• Could demonstrate extensive experience and had a strong business plan with a realistic, yet healthy proposed turnover and net profit

• Had obtained the necessary registration from the local authority to operate as a 38

With the proposals deemed risk-worthy the clients accepted the following competitive terms:


Property value: £260,000

Loan amount: £117,500

LTV: 45%

Rate: 3.00% term tracker

Term: 15 years

Lender arrangement fee: 1.5% (£1,763)

Mortgage payment: £811 pcm capital and interest repayment

ConsultantAndy Elley

Consultant tel: 01732 471644

Consultant