commercial mortgage

kaykay27

Hey guys- just wondering if someone could tell me what kind of documents the banks would look for when someone is taking out a commercial-my friend and 1 (business partners) are in business 5 years and looking to take out a commercial mortgage-any help would be appreciated as want to let ourselves know what ye are getting into before we approach the banks

ferga_com

At a minimum, three years' audited accounts plus confirmation that your tax affairs are up to date. Business bank account statements for six months.

There's not much appetite out there for commercial lending at the present although we've done a small number recently. The proposition will need to be very strong, i.e. show the potential lender that the business can support the mortgage easily, is not in trouble with the recession, has plenty of reserve cash etc.

kaykay27

Thanks ferga_com- i used be a residential underwriter so would i be right is thinking that all the documents required for a commercial mortgage would be the same as doc required for a home loan? Does DSR come into play with a commercial Mortgage?

ferga_com

DSR is relevant but not as important as on a residential application. Commercial underwriters are more interested in the strength and viability of the business as well as the merits of the deal itself e.g. LTV, location etc.

For an extreme example, a residential property development company is likely to have trouble raising commercial finance at the moment, even if the audited accounts show lovely figures.