Commercial mortgage - advice please!

thenewbee

I currently run a rapidly expanding business turning over £60k/yr, approx £40k profit (forecasted for this year). It is expanding and therefore these are conservative estimates. I'm considering expanding into another section of the same industry which requires premises - I've been looking for places to rent but these are few and far between. I have however come across some land with buildings which would be ideal for the proposed business, in a good location for £300k.

The proposed 'new' business has possible turnover of £100k/year once up and running, with profit of £40-50k.

I have no idea how commercial mortgages work. Would it be possible to get a business mortgage for this property for the proposed use based on the figures provided? I have a residential house myself so understand residential mortgages but no idea what the multiples etc are for commercial! Can't really use my home as security either as it's about 85% LTV at the mo (FTBs and we bought it a couple of years ago, 23 yrs left on the mortgage)

Any help, advice or pointers much appreciated as I can't find anything on Google.

antrobus

thenewbee wrote: »

...I have no idea how commercial mortgages work. Would it be possible to get a business mortgage for this property for the proposed use based on the figures provided? .....

I'd have to say no.

Typically commercial mortgages are available at 70%-75% LTV. You might get more if the business had a good trading record or you had additional security to offer. But you have neither.

You need to get your hands on some more capital.

DKLS

It won't be easy getting a commercial mortgage, Maybe try renting the space first and proving the model works, building up the capital and then buy.