In the last 2 years two commercial banks have been launched that have provided several hundreds of millions of pounds of lending to business owners wanting to buy, remortgage  or raise capital from their commercial and business property.

Aldermore Bank PLC and Whiteaway Laidlaw Bank PLC have no branches and deal with specialist Commercial Finance Brokers. Advocate Finance Ltd was pleased to be selected as an approved broker by both lenders, which was in recognition of our professionalism and expert knowledge of the market.

The simple difference with these two lenders is that they will approve applications that other banks will not. They still want the application to provide proof that the customer can meet the repayments. Examples of deals that they have financed are shown below. Each once was a good proposition but was rejected by a High Street lender.

• Commercial office block financed at 75% loan to value
• A portfolio of commercial property financed with short term leases
• 100% finance achieved for business owners looking to buy property they currently lease
• A customers trading accounts suffered a one off loss due to a bad debt and the lender listened to the explanation and provided the loan to buy a commercial property.

No deposit down and 100% commercial mortgages are available for business tenants that currently occupy the business premises.

The way the scheme works is to help the tenant if they are receiving a discount to the market value of the property from the landlord. Normally the lender will only lend against the lower of the purchase price or the valuation.

Example

• Purchase Price of the Commercial Property £200,000
• Valuation of the Commercial Property £286,000

The standard practice is lenders will only lend against the £200,000 (because it is the lower of the two) and still require a cash deposit in the region of £60,000.

However if the customer is the existing sitting tenant, there are lenders in the market that will lend against the valuation of £286,000 and provide a loan of £200,000 or 100% of the purchase price.

This financing arrangement is not just fiction, it is reality and we have helped a number of customer buy their existing business premises with no or little deposit.