What Lenders Need to Know
Any mortgage lender will want to be sure that your
business is on a sound financial footing before agreeing
to a commercial mortgage.
A lender's main concerns are that:
- you will be able to repay the money
- the property is worth enough to cover the amount
borrowed if you default
Do not over-estimate the value of a property. A
lender will almost certainly appoint a surveyor or
property appraiser to inspect and estimate the value of
the premises.
You will be asked to provide information about your
business' financial performance, which will probably
include:
- audited accounts for the last two years
- indications of current performance
- a profit-and-loss forecast for the next year
- business bank statements for the previous six
months
- CVs or profiles of each partner or director in
your business
- asset and liability statements for each
applicant
If you are buying a business and property combined,
it is likely you will need to supply the lender with
additional information, such as:
- why the business is being sold
- projections on how the business is expected to
grow
- details of any personal investment there might
be
- credit status of the business
Bear in mind that you will almost certainly need to
find a deposit of between 20 to 30 per cent of the
purchase price of the property.
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Reproduced with the permission of Business Link (http://www.businesslink.gov)
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