How easy is it to get a Commercial Mortgage in the UK?
As is the case when applying for any mortgage, be it a residential or a
commercial mortgage, the better your credit and the better the collateral, the
easier the process becomes. But that doesn't mean that if your credit is less
than perfect, or you want to purchase commercial property in a less then
desirable part of the city, that you are automatically locked out of getting
the money you need. It just means that you need a "friend" in the business.
When you are applying for a commercial mortgage your potential lender will
consider your credit rating, your business' balance sheet, the purpose of the
loan, and the type and location of the proposed property as well as that
property's appraised value. If every one of these items do not fall within the
lender's acceptable guidelines then you may get a "no thank you" instead of a
pile of money. Considering the amount of paperwork that you may have to
complete in order to get a decision, be it a positive or negative one, you want
to make sure that you have the best chances of securing that loan before you
even start.
And that is where having a "friend" in the commercial mortgage business comes
into play. If you were going duck hunting, and only had one shell with you,
then you'd better be a pretty good shot. On top of that, you'd better not be
planning to serve roast duck to a crowd because you're only coming home with
one duck if any.
Oddly enough, the same holds true when you are applying for a
commercial mortgage.
Different lenders have different requirements for granting an approval. Since
your goal is to make getting a commercial mortgage loan approval as easy as
possible then you need to carry more than one shell with you. The best way to
do that is to use the services of a commercial mortgage broker.
A broker
represents you and submits your commercial mortgage loan application to many
lenders. Your "one shell" turns into a whole case of ammo as your application
makes it across the desk of potentially hundreds of lenders. The odds are
greatly in your favor that you are going to get an approval from at least one
lender and, the truth is, many borrowers end up with several interested lenders
and can actually negotiate the terms and conditions which suit them exactly.
Since your commercial mortgage loan broker doesn't earn their fee unless you
get approved, they work with you to make getting a commercial mortgage loan as
easy as possible. And, since the broker gets paid by the lender and not you,
there is absolutely no reason not to engage their services.
Even if you had access to the same quantity of lenders as a broker does, you
would have to fill out a separate commercial mortgage application and submit it
to each lender. That process alone would take you more time than it takes to
drive across the continent. A broker uses the same application and sends it to
all of their lenders.
That fact alone makes it easier to get a commercial
mortgage than doing it yourself does. Even better is the fact that the broker
already knows the terms and conditions that each of their lenders utilize. The
broker will only send your application to those lenders whose qualifications
you already meet.
Just like with everything else in life, there is an easy way and a hard way. If
you're looking for the easy way to get a commercial mortgage loan then I
suggest finding the best broker for your needs and let them do all the work. It
doesn't get any easier than that!
About the Author
Commercial Lifeline are independent Commercial Mortgage brokers saving you money on your Commercial Mortgage and Bridging Finance through lender choice.
Download our free Commercial Mortgage guides by visiting our Commercial Mortgage Guide page.
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Darren Yates
