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> Commercial Property: Restaurants, Cafes, Takeaways
The growth in eating out over the last five years in the UK has seen many mortgage lenders become more willing to lend here. However, a lender will not be just looking at an applicant’s ability to cook, but also how sound a business proposition they have.
The main issues a lender will be interested in when looking at restaurant/café commercial mortgages are:
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• Location especially important with restaurants reliant on passing trade.
• Local demographics are there plenty of potential customers with sufficient spending power likely to be attracted to eat at the establishment?
• Previous restaurant experience of the applicant.
• Is the building a stand-alone property, or part of a complex?
• The value of the property itself, rather than the existing goodwill achieved, which may or may not last. |
In terms of loan-to-value (LTV), 75% is the norm which leaves a considerable 25% to stump up in the meantime.
Many lenders will also want to know of any possible contingency plans, just in case projected cash flow does not materialize. They may also be interested in the security of the building. Environmental issues such as asbestos will also need to be checked for. Any potential health issues should be rigorously checked as local council environmental officers will come down hard if the place does not come up to scratch once the business is trading and could even threaten to close it down.
If you are looking to borrow money for any type of property for any purpose, please complete a Mortgage Enquiry Form above and we will arrange for one of our specialist mortgage advisers to contact you. Alternatively, you can call us on 0845 108 0505.
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