When you are running a business, especially in the early years, cash flow can be a perennial problem. You have regular payments to make to your suppliers, wage bills to meet and maintenance to carry out. Yet some of your customers, especially the big ones, seem to make a deliberate practice of delaying payments till the last possible moment.
So it’s not surprising that a lot of businesses end up with adverse credit problems. If you are one of them, you may feel you have no hope of obtaining a commercial mortgage. However, for those requiring commercial mortgages in the UK, there are a number of possibilities.
First of all, be positive. Because so many things can happen to impair your credit, many of them beyond your control, there’s no need to feel embarrassed or ashamed when looking for a solution. Any broker will be well acquainted with the problems of running a business.
In recent years an increasing number of commercial lenders have come into the UK market who specialise in adverse credit situations. Your broker can put you in touch with some of these. You should be ready to explain the circumstances that led to your credit problems – the lender will prefer to hear them from you, rather than from your creditors. You may have to pay higher interest rates and accept other less favourable terms such as higher arrangement fees, but there certainly should be a lender who can accommodate you. And remember, this market itself is becoming more competitive, so even here you may well be able to haggle over terms.
You may have quite a good income and not have been in debt, yet have been turned down by a standard lender because you are unable to prove your income. This could be because you are a sole trader or partnership, your income fluctuates, or for other reasons. There are now an increasing number of lenders who will provide self-certification commercial mortgages. These lenders will provide up to 75% without requiring three years’ accounts or an accountant’s certificate. In fact some, though only a few, will go up to 85% or even 95%.
Nowadays there’s no need to despair if you have credit problems. And there is certainly no need to let the situation stop you from obtaining finance that would improve your business. Many lenders of commercial mortgages in the UK understand the situation and are willing to meet you half way.
Please note that the FSA do not regulate commercial loans or commercial mortgages