More information about commercial and industrial
property investment

When buying commerical or industrial property there are generally two scenarios. One is a purchase purely as a stand alone investment. The other is a purchase by a business owner who will use the premises for the future operation of his/her business thereby becoming an owner / occupier.

In the first scenario the purchase of a commercial or industrial building as a stand alone property investment will result in maximum lending against the property purchase at somewhere between 60-70% of the purchase price /property value.

Factors such as - the lease term , strength of tenant , location , building type, saleability, borrowers personal covenant, adaptability of premises - will all play a part in what level a lender is prepared to approve a loan to.
The balance of the purchase price will therefore need to be provided by cash or borrowings against the equity in other property owned by the purchaser. The latter option will of course depend upon the applicants ability to service the total debt.

In the second scenario where the business owner wishes to purchase premises from which to conduct his/her business, some lenders are more lenient on lending levels and will advance mortgage money to a much higher level and in exceptional circumstances fully fund the purchase.
The level of lending will depend upon the strength of the business, particularly profitability, current rent being paid, length of time the business has been operating, location and the borrowers personal covenant..

Before making any decisions in either scenario we suggest you contact us at Oliver Mortgage Services, provide us with a brief of your requirements and let us do the legwork for you. You wont be disappointed!