Commercial Business Loans

KarlN109 · 4 January 2019 at 1:57PM

Hi. We are in the process of purchasing a freehold business and have discussed what effectively is a 'commercial mortgage' with a financial broker. We have been advised that they would charge a 2.5% fee on the value of the loan. So on a commercial loan of £300k, this would amount to £7,500 (no VAT applicable). Their selling points are that they would; approach a number of banks for the loan, set-up and have bank meetings, sanction. They would also support with the business plan and throughout, which we have been told can be quite arduous and complex. The fee seems excessive and so I was wondering if anybody had any suggestion or thoughts on this? Thanks in advance.

[Deleted User] · 4 January 2019 at 2:12PM

The fee doesn't sound excessive given what you're asking them to do, although you'll always find someone cheaper.

It's always wise to get cheaper quotes, and if you need less help than they are offering, consider a DIY solution.

waveneygnome · 4 January 2019 at 11:28PM

Are you just buying an empty commercial property?
Or is there a business already operating from the premises, and you are buying the business and premises?
Have you any experience in the industry you are going to operate in?
For commercial mortgages, you usually need a larger deposit - typically 20-30%.

2.5% sounds on the higher side. Typical high street bank would charge between 1-2% (negotiable). Is there a reason you want to go through a broker - can yo approach you existing bank first, even if it’s just to give you an idea of what they can offer.

Commercial Business Loans

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