Commercial Property Mortgages and other finance for businesses.

Commercial Property Mortgages and other finance for businesses.

– Commercial property mortgages

– Asset finance

– Loans to Buy a Business

– Factoring & Invoice Discounting 

As a member of the NACFB – National Association of Commercial Finance Brokers, Fifty Nine Financial is able to fully support our clients with a wide range of commercial finance solutions.

Commercial property mortgages, asset finance, loans to buy a business, factoring & invoice discounting. As a member of the NACFB – National Association of Commercial Finance Brokers, Fifty Nine Financial is able to fully support our clients with a wide range of commercial finance solutions.

Supporting UK Businesses

Since the current Corona Virus pandemic, a number of my clients have raised questions relating to commercial funders appetite to still lend money. However, commercial lending is still going strong with lots of options out there.

Of course, there are some new considerations, such as if a business has been adversely affected by Covid-19 and the company’s ability to continue trading moving forward. However, there are still plenty of options out there for commercial finance. We have established relationships within the commercial finance sector that we have built up over a long period of time. As a result, this means we can find the right finance facility your business fast. We also may be able to help provide a solution where other have not be able to.

Businesses can spend huge sums of money renting offices, warehouses, units etc. A commercial property mortgage is a facility to help acquire premises. Often the monthly payments on a commercial mortgages can be similar or even less than the rent payments on the property.

The type of business based at the property can influence the maximum loan to value that is available for a commercial property mortgage. Loan to value for commercial property mortgages would typically range between 60-80%, depending on the industry. However, in the healthcare sector, some lenders take a more favourable approach. For example, we have access to 100% mortgages for dentists to buy the property where they are based. In a similar approach, we can access 90% loans for Pharmacists to purchase their premises. One of the reasons for this is the sustainability of that type of business moving forwards.

No matter what sector your business is in, there could be a solution to finance the purchase of a commercial property. However, the quirkier the scenario, the higher the deposit a lender is likely the require.

Asset finance is a type of commercial finance used by businesses to acquire assets such as equipment, tools, vehicles, machinery, and even software etc. It works by spreading the cost of these assets over an agreed period of time. 

One of the main reasons why companies use asset finance is that it allows better management of cashflow should the aim be to grow the business, rather than paying cash up front. Therefore, this leaves your cash reserves untouched and available if needed for other reasons. Additionally, any profit gained by your business whilst using the asset may ultimately offset the cost. It can also be possible to release cash tied up in existing assets. 

Once a customer has chosen the asset they need to acquire, a finance deal can be agreed where you have a regular payment plan. Typically, a very fast turnaround can be achieved. You could have access to the asset in quick time. Depending on the structure of the finance facility, at the end of the term the asset can either be owned by the customer or handed back to the finance company. This could be in the form of either a leasing agreement or a hire purchase agreement. Therefore, there are a number of option in this area depending on the requirements on the business. 

Every day in the UK, businesses are bought and sold for a variety of reasons. It could be an experienced professional taking the plunge to acquire their own business, a business owner buying up the competition, or even an entrepreneur taking strides into a new industry where they have spotted a great opportunity. 

If the proposition looks to be a sound investment, there may be a finance provider that could lend the money required to help fund the purchase.

Key sectors that can be funded include:

  • Healthcare
  • Manufacturing
  • Nurseries
  • Retail
  • Contracting businesses
  • Hotels
  • Pubs & Restaurants
  • Commercial investments
  • Agricultural

As with other areas of commercial finance, the sector can play a huge part in how the deal can be structured. The perceived risk to the lender will have an influence, as it does in all forms of borrowing. Certain funders will specialise in funding for certain industries. The loan to value will be influenced by the industry with the norm being between 60%-80%. However, healthcare is again looked at very positively by a selection of lenders. Loans to buy a healthcare business can go as high as a 100% depending on the specifics.

For many businesses, 30/60/90/120 day payment terms can bring some financial pain when it comes to cash flow. However, there are some commercial finance options available that are designed to bring some relief in these situations.

Factoring

For a business with significant outstanding invoices, Factoring can be a great solution for turning those unpaid invoices into cash quickly. Factoring is a commercial finance facility where the finance provider can take control of your sales ledger. From there they can manage the collection of outstanding debts directly with your customers whilst you get settlement upfront from the finance provider. Cash flow is essential for any business. Many businesses need cash quicker than their invoice terms will provide it. If this sounds familiar Factoring could be a great solution for your business. It’s a very common form of commercial finance.

Invoice discounting

Invoice discounting is very similar to Factoring. The main difference being that you retain control of your outstanding invoices and ledger. You maintain the responsibility of chasing your customers for outstanding debts. For this reason, Invoice Discounting is a more cost-effective way of financing than Factoring. This is simply due to the lower administration requirements for the finance provider. Invoice discounting helps to avoid waiting 30/60/90 days for invoices to be paid. Turn outstanding invoices into cash, fast. Outstanding invoice values could be release as quickly as 24 hours depending on the individual circumstances.

Finding The Right Solution For You

Whatever your requirements, we will always strive to find the right solution for you and your business quickly. Commercial property mortgages, asset finance, a loan to buy a business, or factoring & invoice discounting. If you’d like to discuss your situation in more detail Get In Touch!

More blog posts...