Commercial Mortgages

Sourcing senior debt is one of our core activities and the providers of commercial property mortgages range from the normal high street banks, large building societies, smaller mutual building societies, institutions, EU and international lenders.

Given the large number of potential lenders there are an equally diverse range of terms offered from the size of the loan, the length of loan, the repayment profile, interest only, amortisation, how much is to be repaid over the term, can there be a bullet and if so the size of the bullet, the margin over the cost of funds, fixed rate, swap, gilt, and finally the lenders fee.

In our business we are communicating all the time with lenders so keeping ourselves up to speed with the market place. By not wasting lenders time we build relationships and an understanding of what differentiates them from other lenders, not forgetting the lenders ability to perform in the allotted time frame and whether their professional advisers will hinder or help the process along.

We help new borrowers and established larger commercial property owners compare the terms being offered in the market place prior to discussing the proposal with their existing lender. We can find lenders willing to provide alternative terms better suited to the borrower's requirements than their existing lender.

It always surprises us how much variation exists amongst the lenders, even for the same property. We are also surprised when we see terms offered to a borrower when we know they have offered better terms on other similar properties. Just like most businesses, finance too is a people business.

For the foreseeable future there is little likelihood of speculative commercial development without exceptional circumstances but we can put in place funding to enable the construction of commercial property for pre-let or pre-sold developments by combining interim land and development finance with a take out put in place with a longer term facility where the income stream will provide the serviceability and debt reduction. Our years of experience in arranging development loans will enable us to assist in the creation of the whole package.

In some cases the property transaction crosses over into the territory of a bond style investment providing lenders with the opportunity to lend against cash flow to provide better terms than the traditional loan to value method. This may occur where the covenant strength of the tenant is particularly strong, the lease is sufficiently long without break clauses and predetermined income increases at review with reference to an index such as the retail price index. In these circumstances the transaction focuses on the financial standing of the tenant and the ability of the cash flow to increase the size of the loan. The property asset becomes largely incidental save it should not be a white elephant if anything untoward were to happen to the tenant.