Hello all, My husband has recently had some bad news at work which means that over the next 12 months he could be out of a job completely. He's the main earner and he wants to take this opportunity to get out and do something different but he's done the same job for 15 years and built up to such a good wage he really couldn't step into a new job without taking a big wage drop which we can't afford. We've been thinking about other options to go into and have thought about buying a business together. It's a boarding kennels with an asking price of £450,000. We have £17,000 to put down as a deposit but from what I understand we'd need a commercial mortgage with 25% to put down which is £112,500!!! How is anybody supposed to just get that kind of money? Is this totally out of our reach or is there something we can do? I should also mention that this does include a big family home, so we would sell our house to release the £17,000 equity. I don't know if the living premises affect the type of mortgage we will need? I'm not sure if a commercial mortgage is right? Thanks in advance, any advice is appreciated
With only £17k, you'd have to borrow £433k plus other working capital needs. Sorry, but that's just not going to happen. I just can't see how the business would possibly be able to afford the interest/repayments on such a huge loan and banks won't lend due to high risk. A 25% deposit is fairly normal for a commercial loan.
I'd also warn you that "lifestyle" businesses like that are notorious for being grossly overvalued by hopeful sellers. It's probably worth a lot less than that, maybe closer to the bricks & mortar value of the house.