If you have an asset such as a Commercial Property then a loan or Commercial Mortgage may be used to provide the funding to purchase or refinance it. Lenders will take a legal charge over the property which will only be released when the borrowing is repaid in full.
Secured lending can include overdrafts, loans, Commercial Mortgages and a range of other borrowing facilities with a lender. Occasionally a second lender may provide an additional borrowing facility and register a 2nd legal charge behind the first lender to secure their debt. If repayments aren’t met on a Secured Facility the lender can take ownership of the asset and dispose of it in order to repay their loan.
Lenders may provide Secured Commercial loans and Mortgages up to 80% of the value of the property. Typical amounts are between 6-0 – 70% Loan to Value (LTV). Amounts will vary, but many lenders will have a minimum loan amount of £100K given the costs involved with providing this type of facility. Borrowing terms again will vary on the lender, with repayment terms up to 25 years possible in some cases. Many lenders will offer a loan on a repayment profile of between 15 and 25 years, but only commit the loan for a 5- year period. This allows you the option of accessing cheaper rates for your loan and gives you the freedom to move your facility elsewhere when the loan commitment expires without penalty.
Rates may be fixed or Variable according to circumstances and the lender, and capital repayment holidays may be arranged subject to arrangement. These types of facilities can be used for many different types of Businesses and properties, including:
Hotels and Guest Houses, Pubs and Restaurants, Manufacturing and Engineering Factories, Doctors and Dentist Surgeries, Land and Agricultural Holdings, Specialist Care Homes, Shops and Retailers, Wholesalers, Professional Services Offices, Accountants/Solicitors/Insurers etc. Commercial Investment Property.
Legal Advice will be required in order to arrange a Secured Business Loan to ensure you are fully aware of the risks of entering into such a facility. Lenders will work with your own Solicitors to arrange this or may appoint their own.