We are noticing much greater numbers of clients looking to raise funds in the commercial sector and this is a very positive sign that confidence is returning and not just in the residential purchase or re-mortgage arenas.
Commercial lending was long the domain of high street banks and particularly so when all that was needed was a site meeting coupled perhaps with a good lunch with the bank manager and often the funds were quickly available! Life has changed and the high street lenders are now more dramatically conservative in their lending with the decisions often being made at credit and risk committee level. This has opened up the market in many differing ways with a myriad of new lenders coming to market during the last few years covering almost every possibility from lock up shops to multi-million pound office blocks and hotel complexes.
There are lenders who will offer – short term lending for the swift purchase of an auction property; funds to support multi development or self-build including commercial units; funds to assist the re-mortgage of large property portfolios; funds to help buy existing businesses or extend current business portfolios or Houses of Multiple Occupation; funds to convert or extend offices or factories. The list goes on! In fact it is almost endless. If there is a defined, affordable commercial need, then there is likely to be a lender out there somewhere looking to write the business!
Of course, rates and terms will vary depending upon the type of commercial mortgage written. Lenders have varying degrees of risk assessment calculations and this will determine the loan to value and charging rate levels.
So, where have all these lenders appeared from? It is no surprise to learn that they have been there for a number of years simply awaiting the return of commercial mortgage demand. Some are subsidiaries of high street banks who have criteria which suits certain market segments. Others may be as a result of private funders who are looking to secure a decent return for their investment as against the poor market figures at the moment.
As always, please ensure that you get professional independent advice before entering into any agreement.