Many people approaching the application process of commercial mortgages are unaware of the significant differences between commercial mortgages and a traditional residential mortgage. The main way in which they differ lays in the fact that lenders apply a whole different set of lending criteria to an application for a commercial mortgage than they do a residential mortgage. The problem is further exacerbated due to the fact that these criteria are often considerably different from lender to lender.
The second major difference is that commercial mortgages require a much fuller set of documentation to be prepared and submitted as part of the application process. This documentation will definitely include a full set of audited company accounts, along with a strategic business plan which indicates how the company will benefit from the acquisition of the new property along with a cash flow forecast demonstrating how the repayments will be met. It is also highly likely that you will be asked to fully disclose information regarding share holders and company officials. To make matters even worse, each lender you approach may well ask for the supporting documentation to be prepared and presented in a different format, meaning you would need to re-create these documents for every lender you approach following their standards and guidelines.
As you can see, commercial mortgages are for from straightforward. Let is imagine for a moment that you do have the time and skills to produce multiple sets of this documentation, and that you are fully able to contact lenders directly. A further problem raises its head at this point. Each individual will have a different application process, and you will need to apply for you funding with as many as possible in order to avail yourself of the best in financial mortgages for your business. You will need to manage and monitor the entire process for several distinctly different applications, a time consuming and complicated task at best.
So what can you do to make things simpler? To streamline them and make sure you receive the best mortgage offer you can possibly get? The most sensible way would be to employ the services of a professional broker who specialises in commercial mortgages. The benefits of taking this form of expert advice and service are many. A broker will have more lending options at his disposal, and will be able to search the market and find the commercial mortgages that best suit your needs. A good broker will assist you with preparing all of the relevant documentation, and then submit your application to a group of lenders as a single batch; they will contact them directly under a single application. Additionally, your broker will keep you advised of the status of your application and help you through any problems that may crop up. Overall, it is considered best advice to use the services of a qualified and licensed commercial mortgage broker, so that you can be assured of availing yourself of the best in commercial mortgages.
Darren Horne is Managing Director of Best Commercial Finance Limited who are commercial mortgage brokers specialising in providing property development finance and short term bridging loans.
