Commercial Mortgage and Development Finance Lenders open for business

Commercial Mortgage and Development Finance Lenders open for business

13:20 PM, 17th March 2012, About 10 years ago 29

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If you are a regular reader of our news and blogs here on Property118 you may have noticed that in the last few days we have added some new badges to the right margin of our website advertising Commercial Mortgages and Development Finance.

When we started we made a pledge never to charge our readers and that’s not changed. If you need help we will endeavour to provide it free of charge. We make our money from advertisers and organisations that employ us for marketing and research purposes. We never pass on data without your permission.

As you may know, my business partner and I founded a commercial finance brokerage in 1990 and retired from that business in 2009. During that time we met with several of the movers and shakers in the banks and niche lending circles and we were founder members of the National Association of Commercial Finance Brokers which reaches it’s 20th Anniversary this year.  We remain very close to the NACFB and regularly network with their members and patrons. We know the right questions to ask to identify whether a project is financeable and we know who to refer you to when you need help. As you can imagine though, having retired from that business three years ago and having pledged to help for free we needed to systemise the process to keep it free.

We did this a while back when we launched our buy to let mortgage sourcing software, which we have also started to advertise more prominently on the website. That’s been very popular as it allows people to input their details and to consider the most popular lenders products, obtain quotes, calculate returns and basically to play around with figures to get a very good understanding of which lenders products are best suited to their requirements and perhaps more importantly, the optimal levels of finance.

The Commercial Mortgage Enquiry Form and the Development Finance Enquiry Form work slightly differently. This is because commercial finance proposals are underwritten individually. It’s not quite as simple as completing boxes and getting a quote. However, there is a standard set of questions we have been able to put together to establish who we should refer enquiries to, so that’s what we have done. This allows us to continue to refer our readers to the right people whilst not having to charge for the service. If anything comes of the deals we may receive a small commission but I’m sure nobody will have a problem with that. Rest assured we will only ever refer you to an NACFB broker who subscribes to an OFT registered Code of Conduct, secures their annual CPD certificate and whose services are backed by Professional Indemnity Insurance.

The bottom line is that we have made it cost effective to continue to provide this service and indeed to make it more widely known that such a service exists. Hopefully it will grow in popularity and create further interest in Property118, which of course is very important to our advertisers and the entire Property118 community. The more people that share their experiences the more we all learn. A famous quote that my very good friend Vanessa Warwick of the Property Tribes Forum often uses (I’m not sure of who first said this) is “we can never learn less” .

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by Jonathan Clarke

19:57 PM, 18th March 2012, About 10 years ago

Thanks Mark. I tried my own business banker, great bloke but the door remained firmly shut. I have thought about approaching other banks in the manner you suggest  and I may now do this. If all else fails I will probably just let it ride. It does yield 12% so cant complain too much and it is a safety net I guess. Its a nice problem to have so now that I have had my moan i will knuckle down and decide on a way forward. Cheers

by Mark Alexander

20:04 PM, 18th March 2012, About 10 years ago

From what you have told me Jonathan it's a very doable deal. It's a possibility that Barclays people in your area have simply been told "don't do deals in the Private Rented sector". It happens. Don't take that lying down, shop around, move your banking, you might even get a shock when Barclays realise they are likely to lose your custom. I've seen it many, many times where banks do a u-turn at the 11th hour and offer a better deal than their competitors are offering just to retain customers. They don't like former loyal clients telling everybody they've moved away from them and 'bigging up' their competition. I'm pretty sure that from the list I've provided and the basis I've suggested you present your deal you will attract the funding you are looking for if you decide to go for it.

by Jonathan Clarke

20:15 PM, 18th March 2012, About 10 years ago

Right you spurred me into action now! I`ve put this on the back burner for far too long.  I will make some calls tomorrow and let you know how I get on. Thanks 🙂 


6:15 AM, 19th March 2012, About 10 years ago

I think if a highly successful LL such as Johnathan is struggling to obtain finance for his perfectly viable business model;  what hope is there for us ordinary mortals!?
The banks are pathetic.
What about those rip off loan companies like Ocean Finance, might they be a solution!?
Are they going to start selling apples and pears as they don't seem to be willing to engage in their previous business model of lending money!?

by Mark Alexander

7:23 AM, 19th March 2012, About 10 years ago

That's the point of this article Paul, some banks are hungry for business but they dont make themselves very obvious, they prefer to deal with their known contacts than to get mobbed.


8:14 AM, 19th March 2012, About 10 years ago

Are you saying that their known contacts are all they wish to deal with and are sufficient for their businesses.
How are new contacts to be generated if these lenders won't look at them.
Obviously they are playing so safe as to be ridiculous; but I suppose it's their money,  so they can lend it or not to whoever.
But surely they will want new business contacts, the old ones will die off or sell up, then what will the banks do?
It seems that even long established LL are struggling to source finance.
It just seems counter -intuitive to me that they won't even lend to these LL.

by Jonathan Clarke

8:46 AM, 19th March 2012, About 10 years ago

Morning all.  Just sent an e mail to my local property manager at Lloyds as a starter for 10. Will see what that turns up!

by Mark Alexander

8:52 AM, 19th March 2012, About 10 years ago

I think you are still missing the point Paul, the lenders that are open for business will lend to new landlords if the deals make sense and are presented properly by a trusted contact. Lenders are using their broker allies as filters so that they don't get overwhelmed with applications based on expectation levels of terms that were the accepted norm pre credit crunch but are a country mile away from what's avialable in the current market. A well presented application will match exactly what the lender is looking for in terms of LTV's etc. and will be presented with all the information required for a lender to make a decision. That takes skill and it's highly unlikely that a borrower will even know the right people to talk to, never mind how they would like a deal to be presented. Never more have commercial finance brokers been so necessary for businesses to raise funding.

by Jonathan Clarke

10:25 AM, 19th March 2012, About 10 years ago

Paul you have a enviable talent of  always seemingly painting an entirely different picture to the reality I see before me!  Either its me not explaining myself clearly or you who do not perhaps understand what is really not that a complex business model. Ive tried to explain it many times to you in other threads. I want you to be successful too.........  Overall  I`m not struggling to raise finance for myself as an individual nor for my business model. Ive just received a mortgage offer on another standard BTL purchase only this month.  I`m struggling with one particular property which represents approx 1% of my business. It wont bring me down if I do not secure the finance I seek.
. The one I was talking about is studio flat was bought more as a buy for my daughter leaving uni. It yields 12% in any case  so if  she doesnt want to live there i will just leave it in there as part of the portfolio earning me 10% more than it would in the bank anyway. I was kinda aware of the potential mortgage problems prior to purchase so I bought it cash as the BMV price and location was irresistable to my needs at the time and I needed to move quick to secure the deal. I did not and do not need to raise finance on it but it would be nice if I could. My business model is not affected by what happens to it. I appreciate this is a fortunate position to be in and I`ve worked hard to get into that position

But you are right to highlight what is in effect a point about cash purchases. If this was perhaps a first investment purchase for someone and they bought cash hoping to maybe refurb and then pull out their cash  6 mths down the line and repeat the exercise  it is imperative that they do all the necessary DD they can BEFORE hand to ensure that .....a) their personally financial position means they could raise a BTL mortgage and also that...... b)  the property ITSELF fits the criteria that lenders consider suitable for a mortgage.  If not they could become unstuck with all their eggs in one basket.  This studios small sq footage, low value etc means it  falls down on several of the criteria that mainstream lenders require so maybe would not be I would suggest be the best 1st time purchase for a novice investor. All investors circumstances are different though so best seek individual expert advice for your own situation   

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