Commercial mortgage for business premises

juliemario

Hello.
I suspect this is a non starter but would appreciate any advice.
My husband and I have been looking at business premises for several years but have never found anything we were happy with. Life also got in the way.
Anyway, a commercial property has just come on the market in exactly the right spot and about the right size.
We would like to run it as a coffee shop - currently a retail shop.
We do not have a deposit but we have at least 80k in equity from our house. We cannot release the equity as we are at our limit on the amount we can borrow based on current salaries.
The property is offer over £185,000.
Would the banks be able to offer us anything?
Thanks

Savvy_Sue

I think without a deposit, you'll struggle.

Plus, if you don't have a deposit, how are you going to pay the up-front costs of setting up a coffee shop? These may include planning permission for change of use, check that you'd be able to get that before you go much further.

Atidi

juliemario wrote: »

Hello.
I suspect this is a non starter but would appreciate any advice.
My husband and I have been looking at business premises for several years but have never found anything we were happy with. Life also got in the way.
Anyway, a commercial property has just come on the market in exactly the right spot and about the right size.
We would like to run it as a coffee shop - currently a retail shop.
We do not have a deposit but we have at least 80k in equity from our house. We cannot release the equity as we are at our limit on the amount we can borrow based on current salaries.
The property is offer over £185,000.
Would the banks be able to offer us anything?
Thanks

What do you mean by current salaries?

Who is going to work in this coffee shop?

If it's your husband then he won't have a salary any more.

And with you having a 1 year old, I don't think you could work there (unless you pay for very expensive child care)

So, it's all down to how good a business plan you have. i.e how many cups of coffee is your husband going to have to sell every hour to support borrowings of many £100,000s plus support your entire family in all other day to day living expenses, plus the operating expenses of the business.

waveneygnome

Sorry to put a downer on your ideas, but I think you will struggle.

Most commercial mortgages require between 20-30% deposit.

In addition they will want to see a business plan, and presumably you would need working capital to start you off for stock etc.

The other big thing to check - is the property freehold or leasehold & +vat.

You need to do loads more research, but from a financial view point with little/no deposit you will have no chance.

paddyrg

Does the commercial property come with an upstairs flat? If it does, you could move in there I suppose - then that £80k will look good as a deposit