General Finance Centre

Commercial Mortgage FAQs

Why should I take out a commercial mortgage instead of renting?

What deposit do I need to put down?

Within my business, who is responsible for the repayments?

What are the main advantages of a commercial mortgage?

Can I wipe away other debt using a commercial mortgage?

Will I be approved if I have a poor credit history?

I am self-employed and have irregular income? Can I get approved?

How long does it take to complete?

How much cash can I raise?

Why should I take out a commercial mortgage instead of renting?

Taking a commercial or business mortgage allows you to own an asset (the business premises) which may appreciate in value. When the time comes to sell, you could have realised a capital gain.

Also, rental payments are generally regarded as more volatile and are more likely to experience drastic increases. Commercial Mortgages therefore offer greater stability and allow for more stable long-term business planning as long as interest rates do not rise too significantly.

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What deposit do I need to put down?

The majority of our business mortgage products require a minimum of 15% of the property value as a deposit (this can be otherwise interpreted as 85% loan-to-value or LTV), however we are able to lend up to 100% of purchase price if additional property or land is available as security.

Generally, the higher the deposit, or equity from other properties, the lower the rate of interest and therefore the lower the commercial mortgage repayments.

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Within my business, who is responsible for the repayments?

This depends on the legal structure of your business:

• COMPANIES - it is most likely that the directors of that company will be liable if the commercial mortgage is not repaid. Directors guarantees are always required
• PARTNERSHIPS - All partners involved are jointly and individually responsible
• SOLE TRADERS - The sole trader or company owner bears complete responsibility and liability

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What are the main advantages of a commercial mortgage?

• Retain your business - raise the business finance you need without have to relinquish a percentage of the ownership of your business (as you may have to do through other channels)
• Capital Gain - Property rises in value. If you buy yours with the help of a business mortgage, you could financially benefit from this when you sell
• Tax deductible - Commercial mortgage interest payments are tax deductible
• Stability - Mortgage payments are generally more desirable than rental payments as they are less prone to large, non-index linked rises
• Better cash flow management - a business mortgage schedule is set out over a number of years allowing a business to better plan for the long term

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Can I wipe away other debt using a commercial mortgage?

Yes. At GFC, many of our clients have taken advantage of our beneficial mortgage rates and products, to consolidate existing costly short term finance (for example, unsecured loans, overdrafts and lease purchase agreements at high interest rates).

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Will I be approved if I have a poor credit history?

We can still help you! We've provided 1000s of commercial mortgages to applicants who not only have poor credit history, but who've also had CCJs, taken out Individual Voluntary Arrangements (IVAs) and even liquidation history.

If you think you might be rejected, or even if you have been rejected elsewhere, CALL US! We maybe able to help. Visit our Non Status Commercial Mortgage page. Click Here to find out more.

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I am self-employed and have irregular income?

Can I get approved? Of course. At General Finance Centre, we've provided plenty of our tailored self certification commercial mortgages to people in the same situation. If you:

• Do not have accounts for your business
• Have accounts which do not show much net income
• Have not been trading long enough to prepare accounts
• Work part-time or are on a temporary contract
• Rely heavily on bonuses / commissions
• Have a low salary but own other assets
• Work freelance

...Then we can still find the right commercial mortgage for you. Visit our Self Certification Business mortgage page. Click Here to find out more.

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How long does it take to complete?

This really depends on the complexity of the application / situation. However, we've provided business loans for many applicants who were desperate to complete as soon as possible (in some cases, within 7 working days). Remember, we provide an immediate decision in principle to speed the process up.

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How much cash can I raise?

We provide commercial mortgages from £25,000 to £50,000,000 for any business purpose or status.

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