| Long
term commercial finance, in the form of a commercial mortgage, offers many
small and medium sized
enterprises (SMEs) the ability to
invest in their business with new technology, new or refurbished
premises,
or increased stock levels.
In the past, it tended to
be only larger organisations with a proven track record who could
obtain commercial mortgages. A large number of younger/smaller
businesses were unable to obtain this type of commercial finance and,
as a result, many businesses have been forced to rely on expensive
short term finance or left to use their owners' residential property as
security.
Fortunately, this gap in the market is now
being targeted by specialist commercial lenders who are willing to
serve the commercial mortgage needs of SMEs and owner-managed
businesses.
The problem
In
the past, it has been difficult for small business borrowers,
self-employed traders, and
partnerships to raise commercial
mortgage finance. This is because:
- Institutional
lenders have focused on larger, corporate lending secured on the tenant
covenant of investment properties. This sector is seen as being low
risk and so has become a favourite of
many traditional
lenders.
- The lending criteria of many
mainstream commercial lenders disqualify applicants who do not have
three years' audited account, those without business plans, or those
with a less than perfect credit history. As the UK workforce migrates
more towards self-employment, greater flexibility is required from
lenders to assess each case on its individual merits. Until recently,
this flexibility has been hard to find. Similarly, in the past, the
requirement for three years' accounts has been a barrier to new or
young businesses.
The
solution
To address these problems, a
number of commercial mortgage lenders now offer commercial mortgages
with some or all of the following features:
- Available
to small owner managed limited companies, partnerships, and
self-employed sole-traders
- Self-certification
option - no need for three years' accounts
- Finance available
for any purpose - no bank imposed restrictions
- Mortgage
arrears, CCJs, IVAs, discharged bankruptcy all considered
- Same
day indicative offers
- Completion in
weeks, not months
- Transparent mortgage
tracking Bank Base Rate
- Mortgage term of
up to thirty years
- Advances from
£50,000 up to £1.5m
To find out more about how commercial finance could help you,
whether you have an existing business or are just starting out, visit Online Commercial Mortgages.
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Copyright
2004 David Miles. You are welcome to reproduce this article on your
website, so long as it is published "as is" (unedited) and with the
author's bio paragraph (resource box) and copyright information
included. In addition, all links to external websites must be left in
place.
About the AuthorDavid
Miles edits a number of finance websites, including TheCashClinic.com
- a UK Personal Finance Portal.
David Miles
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