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Accessible version of the Commercial and business mortgage FAQs page
- What information do I need to provide?
- Once you have located a suitable business and agreed a purchase
price, we will arrange a valuation of the business, which will take
2-3 weeks. We will also require completion of our Mortgage
Application Form (which you will find in the
Key Documents section of this site), along with a CV for all relevant parties, and a
business plan where appropriate.
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- What is a valuation?
- A valuation is a full business appraisal which is carried out by an
independent valuer, once you have agreed a purchase price for the
business. Leasehold purchases will not always require a valuation.
We would be happy to instruct one of our recommended valuers to assist you.
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- Will the valuation be acceptable to every lender?
- We will look to instruct a valuer who is recognised by the majority
of lenders nationwide. Once we have instructed the valuation, we
will submit the same report to a number of lenders to obtain a
choice of lending options.
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- How long does the process take?
- From agreeing a purchase price, we would hope to provide an offer
of finance within 3-4 weeks, dependent on the time taken to
complete the valuation. From here, provided you are happy to accept
this offer, solicitors will be instructed and we would hope to
complete within a further 4 weeks (more for healthcare purchases).
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- Should I select a fixed or variable rate loan?
- There is no definite answer to this question. When making this
decision you should bear in mind the following: redemption costs,
fixed rate term (3, 5, 7 or 10 years), market trends and the cash
flow of the business in order to assess the advantages and
disadvantages of each option.
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- How much can I borrow?
- Lending parameters constantly change, but we commonly arrange a
minimum of 75% of the purchase price of a freehold
business. Lending criteria will be judged according to lender, your
experience, and how you and your business plan are presented to a
lender.
Borrowing is generally restricted to 50% of the purchase price of a
leasehold business, or more with additional
security. The loan term for leasehold lending will depend on the
remaining years on the lease.
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- Will I need to give security?
- We may require a first legal charge over the premises being
purchased, refinanced or developed. 100% funding may be available
for both freehold and leasehold purchases, if additional security
such as a private dwelling house is offered. We would remind you to
think seriously before securing your mortgage debt against your
private dwelling home.
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- What loan term will apply?
- For freehold funding, loan terms would usually vary between 15 and
25 years, and for leasehold funding, the loan term would depend on
the remaining number of years on the lease.
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- How much will it cost me?
- Our fee is payable upon acceptance of an offer of finance from
ourselves. Please discuss our terms and conditions with your local
Christie Finance broker, who will guide you through all the costs
associated with your business purchase.
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- What rate of interest will I be charged?
- Each application will be treated individually and assessed on its
own merits. A standard rate of interest does not exist,
although an average interest rate for any given freehold purchase
would probably be in the region of Bank of England Base Rate plus
2.0%. This premium over Base could fluctuate by approximately 0.5%
depending on the lender’s perception of the strengths of the
proposal. Leasehold lending is usually arranged at a slightly
higher premium over Base Rate because of the lender’s
perceived higher risk.
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- Does it matter if I have CCJs or arrears on my existing mortgage?
- Whatever your circumstances, there’s a good chance we could
provide the funds you need. We assess every application on its
merits so it is always worth contacting us to discuss your options.
If we genuinely feel we cannot assist, we will let you know.
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- What if I’ve been refused elsewhere?
- We specialise in providing commercial and business mortgages for those who have found it difficult to obtain a commercial mortgage from the traditional high street lender.
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- How should I protect my business?
- As your business purchase is likely to be your single largest
investment it is essential to obtain adequate insurance cover to
protect your business in the event of a loss occurring. Our sister
company, Christie Insurance, is one of the leading insurance
brokers across our trading sectors. One of their experienced
brokers would be happy to assist you with a quotation for your
business insurance. For further information go to www.christieinsurance.com.
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