Any idea what a commercial mortgage of 60K would be ?

[OhdearNigel]

Seen this property in our town up with a friend. It would be an excellent place for me to purchase, would do cakes/cake decorating equipment in the front shop and run a small catering company from the back. It's reasonably well situated in a fairly busy but inexpensive part of town and is next to a bridal shop (handy as I do wedding cakes !) What would the mortgage costs be on a 60k mortage ?

on Sea|57357:10801:100:_|2|5|0|2|1||1||||120|0:2147483647:0|0|1|2&propertyNumOnPage=10 here it is

If you have a start up business you wont get one basically unless you have a huge amount to put down!
Assuming you have about 40% of the value of the property to put down, you can expect anywhere between £600 and £1200 fee (which can be added to the mortgage) and then a rate of around 5% per annum for that kind of business, maybe more depending on how many years your business has been running.

If you want some proper quotes make sure you have a business plan, profit figures, sales forecasts etc etc and then I can put you in touch with some nice bank managers at Barclays and LLoyds if you like as they are quite competitive!

If its a start up, it will be VERY difficult. depends on area, LTV etc

Hope that helps
C

C, I've been running it for about 18 years but only as a small business from home alongside full time and part time work since having DD.

What's LTV ?

Sorry, LTV = Loan to Value.

Banks are looking for servicability ie can you pay the mortgage abck 4 times over from cash flow, and for a loan to value of 60% of less. You can get a higher LTV for some industrys but I suspect in your case they will be looking for 60% or even 50%.

I used to do commercial mortgages at Barclays, but even since I stopped 2 years ago, things have really tightened up. Your case will have to be flawless! Mght be worth having a chat to see if they can give you an idea if its worth getting a case together or not. Where abouts in the country are you?

Business managers are under heavy targets to do commercial lending so they will help if they can.

I'm on the sussex coast

And it's no wonder that small businesses are struggling to start up in that case :(

cos how many people have a spare 30k sitting around nowadays ?

I dont know anyone down that way, probably best to pop into local bank to find a business manager (only Barclays and lloyds will have them and maybe Natwest) a start up business manager will be hopeless so make sure you get a higher level one and just run it past them, it could save you alot of time in the long run.

There is a small business load scheme, but again, SO difficult to get

Yes it is very difficult, so much worse than 5 years ago, but you could always rent a place initally

It was only an idea - think I will sit on it until one of the relatives dies ;D

The lease on that building is £4750 a year - so it would be cheaper to buy it outright, that's the frustrating thing.

You might get a small business loan scheme (EFG) worth an ask...if they still exist. The Labour governement changed them so much they became unworkable.

There are loan on line, individuals with spare cash sick of only gettgin 1% on their savings who are cutting out the banks. I read an article about them in the weekend press last weekend. Some websearches might throw them up.

The link didn't work above.

Do you have a house you could remortgage as that might be another way to raise the funds - a mortgage broker could advise.

no - we are in negative equity as DH took out a 100% LTV mortgage before we got married. We can afford the mortgage no problems but we have no equity

hopefully this will work

It doesn't say it's freehold, does it although presumably it is. So you pay £60k for something that yields £4750 or hopes to by way of rent (8% yield if they get that rent before tax) (plus the small ground rents from the long leaseholders of the two flats above).

Good luck with it.

Realistically I don't think you will be able to do anything, sorry...just being realistic, probably for the best as I don't know any business like that that are actually making much money at the moment. It's tough out there for small businesses...sorry! I hope you prove me wrong!

I don't want the business that's there at the moment - I just want the property. I have always wanted a small shop to sell my cakes from and to offer ancillary services such as tuition and equipment for sale. Outside catering is also a possibility and that premises has the possibility of a shop in the front and a catering kitchen in the rear.

Xenia - I spoke to the agent and yes, it's freehold

I woud go cautiously with this one, the property sounds very cheap for premises and two flats. The other thing I would look at is that the flats are sold on long lease, you will need a solicitor to go through this very thoroughly, the ground rent is only £200 per annum will you be liable for repairs, the ground rent wouldt even cover the yearly gas safety checks.

Your legal fees will be steep so you will need cash for searches conveyance etc, why not try and negotiate with the vendor to buy the premises only?

I agree with Chrissie finance is really hard to get, you will need a good reputation with your bank, rules on commercial morts are quite different from domestic, they will also want a bloody good business plan, have you thought about running cake making / decorating classes? this might bump your t/over up a bit, you will also need cash for a refurb / equipment and also probably planning consent change contact your council and ask what permission it has already.

On the other hand my philosophy on life is if you want something badly enough you will find a way to do it. Might be hard but good for you I would go for it.