Select a question
Who is responsible for the repayments?
How can I improve my chances of getting a commercial mortgage?
How should the mortgage be structured?
How much cash do I need to provide for a deposit?
What is the usual length of a mortgage?
Why should we purchase property instead of renting?

Who is responsible for the repayments?
The legal structure of your enterprise will determine who is responsible for the repayment of the mortgage. If you are a sole trader, you bear all responsibility for the repayments. If you have formed a partnership, all of the partners involved are jointly and individually responsible. If you have formed a limited liability company, the directors may be liable if the loan is not repaid.

How can I improve my chances of getting a commercial mortgage?
Lenders give particular emphasis on your ability to repay the loan. The charge on your property adds security but the lender will still base his decision on your ability to repay the mortgage. It will be extremely beneficial to be able to show the lender a history of your earnings, a projection of future earnings and other qualitative information such as profile of tenants, rent cover ratio etc.

How should the mortgage be structured?
It depends on several factors such as the tax position of your company. In general, it is advisable to seek a non-recourse mortgage to protect the enterprise from any adverse situation. We strongly recommend that you speak to your accountant or tax adviser.

How much cash do I need to provide for a deposit?
Lenders view mortgages with larger deposits to be more secure. Most lenders typically like to receive 20% to 30% of the purchase price as a down payment. Depending on your company's financial history, as little as 5% of the purchase price may be enough for a deposit. However do not forget that the larger the percentage of property value you borrow, the higher the rate of interest will be.

What is the usual length of a mortgage?
Mortgages are typically available for any time period between 5 to 25 years. In general, the maximum length of mortgage is usually 20 years for newer properties and 15 years for older properties.

Why should we purchase property instead of renting?
Buying a commercial property is a big decision for many businesses. There are several advantages and disadvantages that should be considered before making your decision. Therefore you should consult your professional advisers before making this decision.