Couple Save their Business with First Time Commercial Purchase

Couple Save their Business with First Time Commercial Purchase

30.08.19 | Written by: Gareth Richards

The Clients: A husband and wife who had run a successful motor trade business out of a rented commercial property for nearly 20 years. They needed to purchase their own premises after their landlord vastly increased their rent, making it unaffordable to remain at their rented property. 

The Property: The couple found a large industrial site in which to move their business, with two detached buildings set in 3 acres of land. It also had further outlying buildings, which needed some refurbishment but held a lot of potential. The new property was in the right location for our client’s trading business to keep its customer base and was within their budget.

Reasons for Finance: The client needed to raise 75% of the £575,000 purchase price. They were losing money on rent and couldn’t afford the proposed increase.

The Challenges: The clients were first time commercial buyers who only had a 25% deposit as they needed to retain some cash for refurbishments to the new property. We needed to source a lender who would lend to first time commercial investors, against the purchase price rather than the standard of a 180-day value or vacant possession, and against a property that needed some initial refurbishment. 

The clients had already agreed to purchase the property before coming to us, without finance in place, so time was critical to ensure they didn’t lose the property.

The Solution: By providing:

  • 3 years of well-documented accounts
  • 6 months bank statements
  • Assets and Liabilities documents for each director
  • Their most recent balance sheet
  • A small business plan

They were able to prove there was enough Net profit within the company to meet repayments and we were able to secure the 75% loan with a well-established lender who specialises in financing motor trade businesses. The clients' mortgage repayments are now half per month what their original rent was, and 75% less than they would have been paying with the proposed rent increase.

To the clients' delight, the case was completed in just over 60 days, ensuring that they secured the future of their business.

Here are the details:

Property value: £575,000

Loan amount: £431,000

LTV: 75%

Rate: 2.99% variable over base rate.

Term: 20 years, capital and interest repayment

Mortgage payment:  £2,789 per month

Lender arrangement fee: Free!

Consultant: Gareth Richards - 01732 471 627 

 

If you’re looking to purchase a commercial property, either for your own business or to rent, please do get in touch to talk through the options!

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

NB: 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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