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  • AndyWallace
    • #2
    • 22nd Nov 06, 7:36 AM
    • #2
    • 22nd Nov 06, 7:36 AM
    Maximum LTV would be 85%. The other 15% could be could be taken from within the equity of your home as a second charge. If you were thinking of selling that then you would need retain at least 15% as a deposit.

    Questions would be what experience you got etc. What are the books like and so on.

    High Street Banks will require forecasts, business plans etc etc etc, will only consider a much lower LTV with the remainder taken out on 2nd charge over your residential home.

    Try Yell.com to find a local broker and ask if they have an introducers agreement into Commercial First.

    HTH
    • AndrewSmith
    • By AndrewSmith 22nd Nov 06, 7:47 AM
    • 2,830 Posts
    • 2,238 Thanks
    AndrewSmith
    • #3
    • 22nd Nov 06, 7:47 AM
    • #3
    • 22nd Nov 06, 7:47 AM
    Agreed,

    75% LTV with high street banks at rate approx 1.5-3% above LIBOR usually on a repayment basis and usually max term 15years

    Max 85% with other specialist lenders at rates of 3% Above LIBOR and upwards. Some offer Interest Only for the first 2-3 years, most have max term of 15 years.
  • lilacgirl
    • #4
    • 22nd Nov 06, 7:52 AM
    Hi
    • #4
    • 22nd Nov 06, 7:52 AM
    Hi,

    Thanks for that.

    I believe some will lend upto 100% but with security, i dont own my own property but have 2 vehicles would this count?

    Also the pub we want to buy is worth £80k above the asking price, the owner just wants a quick sale.

    Thanks Lilac
  • lilacgirl
    • #5
    • 22nd Nov 06, 8:01 AM
    • #5
    • 22nd Nov 06, 8:01 AM
    Hi

    Just thought..

    My partner runs his own business which he will still carry on and I am employed by someone else so will carry on getting an income there, plus theres a manager already in place who runs it. So technically we will be sleeping 'owners'?

    Does this make any difference?
    • AndrewSmith
    • By AndrewSmith 22nd Nov 06, 8:06 AM
    • 2,830 Posts
    • 2,238 Thanks
    AndrewSmith
    • #6
    • 22nd Nov 06, 8:06 AM
    • #6
    • 22nd Nov 06, 8:06 AM
    Commercial mortgages are far more'bespoke' than a residential one.

    You will find that commercial lenders, especially the specialist ones, will look for ways to agree your proposal rather than reasons not to lend.

    You do hve to watch the fees though, they can be rather steep as can the business valuation costs.

    Also remember that it is only the building that you can buy with the commercial mortgage, the actual 'goodwill, stock, fixtures etc' must be funded from your own resources or from unsecured bank funding.

    Andy
    • payless
    • By payless 22nd Nov 06, 12:49 PM
    • 6,577 Posts
    • 2,338 Thanks
    payless
    • #7
    • 22nd Nov 06, 12:49 PM
    • #7
    • 22nd Nov 06, 12:49 PM
    What did Gordon Ramsey say last night... something like 2 private pubs go under every week.
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
    • Conrad
    • By Conrad 22nd Nov 06, 1:57 PM
    • 28,613 Posts
    • 48,629 Thanks
    Conrad
    • #8
    • 22nd Nov 06, 1:57 PM
    • #8
    • 22nd Nov 06, 1:57 PM
    Lilac

    You say the pub is worth £80000 more, this could be the key.

    Ive used lenders in the past that have used the value rether that price which negated the need for a deposit, but beware lenders will value pubs very very conservetivly as they want an easy quick exit route if the loan goes bad.

    They will assume the value will reduce if you get repossesed, this is due to the fact that any buyer will consider a pub less valuable the more owners that have been through it without sucess.

    The Pub sector is just about as risky as it gets so even the highest charging lenders will want a good deal of security.
    Even in my old village the pubs constantly changed hands as its so difficult to get right (food in particular is exceptionally difficult to get right).

    Best of luck but remeber its one of the hardest jobs in the world - it never ends.
  • toonfish
    • #9
    • 22nd Nov 06, 2:38 PM
    • #9
    • 22nd Nov 06, 2:38 PM
    in th ecommercial sector there are lenders that will lend on true value, rather than purchase price, but only for bricks & mortar - not stock or goodwill.
    • Pobby
    • By Pobby 22nd Nov 06, 3:00 PM
    • 5,109 Posts
    • 11,231 Thanks
    Pobby
    Do make sure you examine the books with a fine tooth comb.As already stated it is a hard game to make money in.Our local changed hands and I think the new owners are having a rough time!
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