Finance with Ashley Tate Business Brokers
What can I afford?
The answer will always begin with: "It depends..."
- Is the business leasehold or freehold?
- Are the accounts up to date?
- Is the only security being offered simply a charge on the business or is there other security in the background?
- Is the income derived from the business the only income or is there continued outside income?
- Is there any cash injection on the project?
There are really very few rules that apply here as the market is constantly changing but there are one or two regular recurring features:
- Experience helps and sometimes is essential. It may also affect amount that the lender is prepared to advance.
- You can borrow on both leasehold and freehold businesses and a rule of thumb is to look at loans to value of 75% - 80% on a freehold and 50% - 60% on leasehold as absolute maximums. With supporting security (first or second charges on another freehold property) these maximums can increase to 100% but you might have to cover stock and purchase expenses from your own resources.
- There is always a preference on the part of lenders for the existing proven performance of a business to service the proposed borrowing but outside income can be considered in addition to sensible projections of increased profitability. Each case is treated on its merits but banks are anxious to ensure that you have enough to live on!
The important thing is to look at options available to you. Don't assume that your existing bank or the bank with the most active advertising campaign will offer the best package. Take experienced professional advice - the role of a professional broker or the right bank manager at this stage could be vital and could save you time and money, whilst keeping the stress levels under control.
At Ashley Tate we can put you in touch with the right people who will be happy to meet or talk to you at any stage in the purchase process - at no initial cost to you.
We would draw your attention to the fact that some finance and mortgage brokers charge an advance fee, others say yes to everything when the honest answer should be no, we believe that appropriate arrangements fees should be paid, but only when the job has been done to your complete satisfaction.
For a further chat about finance or for an introduction to the right source just call the office on 01234 831999.
