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100% mortgage for pharmacy purchasing additional storage space

100% mortgage for pharmacy purchasing additional storage space

14.08.18 | Written by: Paul Keddy

The client: The managing director of a successful, family-run pharmacy in East London which has been trading for 20 years. The family had recently expanded their operations to include an online, wholesale pharmaceutical business which has really taken off such that they now require additional storage space.

The property: The MD had found a garage in North East London for sale which had been trading as a car repair workshop. He believed, subject to a little light refurbishment, it would make the perfect storage facility and it was not far from the pharmacy. However, there were others interested in the premises which mean our client was keen to secure a mortgage as quickly as possible.

Having worked with us before, he called for our help.

The finance: Most business owners are granted up to 70-75% LTV for a commercial mortgage, but our client was hoping to achieve 100% funding. We knew that his own bank might be the most suitable option for his circumstance, so we go in touch with the lending team. (Our client was very surprised – he’d not thought of contacting them! We explained that these days, it is also often quicker for brokers to deal with the lending teams of high street bank and as time was of the essence he was happy for us to negotiate on his behalf.)

The application process: As expected, the bank was more than happy to assist.

Prior to submitting the application, we reviewed the client’s accounts carefully to make sure that they would be able to afford the monthly repayments of two premises and put together a business plan for the client to present to the bank.

We then helped the client put together the necessary paperwork to accompany the mortgage application. This included the business plan, business accounts and personal bank statements (which the bank already possessed).

The lender could clearly see the profitability of the pharmacy and the potential for the wholesale business and so was happy to offer terms. The fact that our client was also a client of the bank meant that the process was sped up too. In fact, a full mortgage offer was issued just six days later. We then worked closely with all sides to keep the application on track and ensure the purchase was successful.

Here are the details:

Property value: £410,000

Loan amount: £410,000

LTV: 100%

Rate: 2.7% Variable rate

Term: 15 years capital and interest

Mortgage payment: £2,940 pcm

Lender arrangement fee: £8,200 (2% of loan amount) 

Consultant:
Paul Keddy, 01732 471655

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ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

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