Positive Commercial Finance, the specialist commercial finance broker, reports that they have experienced a 62.5% increase in commercial mortgage lending in Q1 to Q3 2016 compared to the same period last year. Recently the NACFB reported their annual survey indicated an increase of 54.8% in cases completed by members for commercial property lending.
Much of the increase in completions in the sector has come about because of the expertise and service provided by Positive, particularly when a client has been let down when making a direct enquiry to a bank. With a 100% Feefo rating on over 100 cases, Positive has the experience to know what banks and niche lenders are looking for when assessing an application.
Many of the enquiries are for clients wanting to purchase a commercial investment property, who very often mistakenly assume that the same lending criteria apply to commercial as they do to residential purchases. However, this is not the case, and Positive can assist clients with the more complex considerations needed to secure funding, such as a high loan to value and short lease terms.
With access to a wide panel of lenders, some of which are exclusive to Positive, structuring the finance with the appropriate lender is crucial in the success of an application.
For example, primary lenders will usually only lend on a capital and interest basis, the repayment profile may only be 15 years and they may only commit to a 5 year term. They may not even lend at all if the term left on the lease is too short. However, challenger banks will look at longer terms, higher loan to value, and some will consider up to 10 years interest only, but in return they want to see experience in property investment and ownership, and the interest rate will be much higher.
Having the expertise to source finance in a complex funding market is crucial and the key to Positive’s success. For example they are able to provide loans with no personal guarantees, no arrangement fees or ERCs and interest only commercial mortgages.
Samantha Williamson commented: ‘We’ve seen a consistent rise in the commercial mortgage sector in 2016 and this has resulted in a significant increase in business so far this year. By fully understanding what lenders are looking for in an application and having access to an unrivalled panel of lenders, we are able to find the right lender to meet the client’s requirements and the project type. This means we can often effect a better outcome for customers than they could achieve by going directly to lenders on their own.’