If you’re looking to move your business into a commercial property, then first of all congratulations! I’m sure you had to overcome a lot of big challenges to take your business from where it started to where it is today. While I’d love to tell you that securing your first proper business premises is easy, that simply isn’t the case. Understanding what lenders look for, and presenting yourself in the right way, has all kinds of complex factors which need to be considered. Here, I’ve listed a few valuable pointers for getting your commercial mortgage.
The first thing I recommend you do is to treat the application much like you were applying for a job. How do you go about doing this? First and foremost, you need to start building up your self-confidence. Every good lender will consider the experience you’re demonstrating. You might have been running your business for a decade or more, but if you undersell yourself this fact is going to fall by the wayside. Take some time to consider your CV as a business owner. Pin down the most attractive points, and condense these into a few short paragraphs about the projects you’ve completed, the amount of time you’ve spent in your industry, and how you’ve managed to stick to budgets and turn a healthy profit. Make sure you’re including this information in all the applications you make. The lender has never met you before, and they’ll be taking a considerable risk by lending to you. Convince them that you’re a safe bet!
Although you should obviously appreciate the position of any big lender, you shouldn’t be too scared of coming off as a little arrogant. Odds are, you’re going to be applying for several commercial mortgages at a time, and there’s nothing wrong with trying to leverage this fact. When you’re liaising with a lender that seems a little hard to please, mention the other genuine offers which you have on your list. Though you may not think it, most lenders are quite pliable in some areas, such as fees and rates. If you’re not all that great at negotiating, then you may want to find a financial advisor or a specialist in commercial mortgages. They’ll charge a fee, but the loan you’ll get at the end of it can be well worth it.
Finally, go out of your way to demonstrate your affordability. Established mortgage brokers will have many more people to see, so you’re going to have to make sure your pitch is coming off as a sound financial decision for them. If you’re running multiple businesses, make sure you have all the key accounting figures to hand, such as your turnover, assets, liabilities, and net profit. One area where a lot of applicants tend to trip over is VAT. Check that the property you have in mind is registered for VAT. The amount of payable VAT can often dwarf stamp duty. When the property is pretty sizable, the lender will certainly want to know where the money is coming from to cover the VAT bill.