Commercial Mortgage for Trading Premises During Lockdown

Deal Structure

• 75% Loan to Value (LTV)
• Loan amount: £120,000
• Term: 20 years
• Interest rate: 3.67% above Bank of England base rate
• No arrangement fee

Deal Summary

Our clients had successfully operated a used car dealership for 10 years from rented premises. When the opportunity arose to purchase their own commercial unit, they recognised the chance to secure a permanent base for their business.

The used car sector can present challenges when applying for commercial finance, as lenders often take a cautious approach to the industry. However, we were able to present a detailed review of the business, including its strong trading history, previous financial performance and the opportunities the new premises would create.

By demonstrating the company’s stability and future growth potential, we secured positive interest from several lenders and obtained competitive terms.

The client chose a commercial mortgage for trading premises covering 75% of the purchase price over a 20-year term. The facility was agreed on a variable interest rate of 3.67% above base rate, with no arrangement fee.

When lockdown restrictions were introduced, the client became concerned that the lender might withdraw the offer and the purchase would fall through. However, by maintaining close communication between the lender and the client, we ensured the transaction continued to progress.

The commercial mortgage completed successfully, allowing the client to take ownership of the premises. Once restrictions eased, they were able to immediately implement their plans and continue growing their used car business from their new location.

If your business is looking to purchase its own premises, Positive Commercial Finance can help source tailored commercial mortgages for owner-occupied trading properties, even where specialist lending considerations apply.