If you have ever gone through the process of applying for a residential mortgage in the past, you may be forgiven for assuming that commercial mortgages are equally painless to acquire. Although in many cases this can be true, the process involved in successfully availing yourself of commercial mortgages is significantly more complex.
Firstly we need to consider that there are two separate types of commercial mortgages, although they are both closely related. The first type of commercial mortgages covers buying an existing business that has a property attached as the business premises, a restaurant, shop of bar would be good examples of this kind of finance. Secondly we have a mortgage that is used to acquire property for an existing company; in this situation the business will be buying new property such as office space or warehouse space.
You will also be asked to provide a whole lot more documentation to support your mortgage application than you were with a residential mortgage. You will certainly be asked for a set of audited company accounts, along with a well produced business plan showing how your choice of commercial mortgages will affect the business. You may also be required to present personal guarantees and full information about the directors and shareholders of the company.
One particularly sensible way of approaching the acquisition of commercial mortgages is to acquire the services of a professional commercial mortgage broker. Your broker will have access to a far greater selection of lending options than you will, he will also have all of the information about each lending package offered, and will be able to select which of the commercial mortgages is right for you, and that is likely to see a positive outcome to the application.
By employing the services of a broker you will have expert help in preparing all of the required documentation, along with advice on hand whenever you need it. In effect, your broker becomes your spokesperson and personal assistant all rolled into one for the purpose of ensuring that you are accepted by a lender suitable to you and your business.
Even if you could find the same selection of lenders that a broker has available to him, you would still need to fill out a separate application form for each lender, along with preparing all documentation to the standards each individual lender requires. This would be a mountainous task and one that could not be undertaken lightly. A broker can produce one single application, which he will present to every lender in a standard format, removing the obstacle of having to deal with each lender independently.
In summary, obtaining commercial mortgages is neither straightforward or assured if you approach it on your own, it is recommended that you use the services of a specialist commercial mortgage broker who will be able to handle the entire application process on your behalf, and ensure that you receive the best form of funding for you business.