First time commercial loan for self-employed entrepreneur

CONTACT CHRIS

THE SCENARIO

Arranging a first time commercial loan can be overwhelming for many borrowers, so using a broker can be a way of offsetting this difficultly. I recently arranged commercial finance for a young first-time buyer. A self-employed entrepreneur, my client was looking to purchase a semi-commercial property based in Twyford. The property in question had been valued at £800,000 and consisted of four shops and four flats above this.

Unfortunately, my client had no experience in commercial property ownership. As a first-time buyer, he didn’t have any other property assets—and the nature of his work meant it was difficult to evidence his income.

The flats had also been sold on leasehold basis, so the only income from the flats was a very small amount of ground rent.

My client had previously approached another lender, but this lender had pulled out of the deal at the last minute. This meant the deal was incredibly time sensitive, and my client needed me to move very quickly to arrange new finance for him.

He required 65% loan to value (LTV) on a capital repayment basis, which is difficult without proof of income.

OUR SOLUTION

Fortunately, I had previously worked with a niche lender on a similar case, so I felt confident about approaching them for this case. This lender was prepared to offer a capital repayment loan based purely on the income of the four commercial units. This lender was happy to take a positive view on the project, despite it being my client’s first purchase.

I managed to secure my client 70% LTV, arranging a first charge over the commercial property at an interest rate of 4.25% capital repayment basis over 25 years.

If you need a first time commercial loan or are looking to invest in commercial property, I would be delighted to discuss your options with you. Enness Commercial are adept at sourcing some of the best specialist rates available on the market. Unlike other specialist brokerages, we are not beholden to just one lender and pride ourselves on our independence, meaning we can scour the market for the best rates.