Car Showroom Mortgages
Car showroom mortgages are loans to be used for the purchase of a standalone car-sales plot, or other commercial premises used for selling cars.
To qualify for car sales mortgage finance the property must not have a workshop or petrol pumps, or hold hazardous materials on the premises.
Lending Conditions
Most commercial mortgage lenders will lend against property used for selling motor vehicles, however, the qualifying criteria differs andf has tightened up significantly with both High Street and specialist lenders.
Mortgages are available from both High Street and specialist lenders. Applications will be considered from a range of businesses e.g. mature businesses with strong accounts, or start-up businesses with no accounts.
A commercial mortgage broker will help to determine the best lending source for your business based on your unique situation, and to prevent multiple stamps accruing on the applicants credit file.
This is achieved through TAL Commercial selecting only appropriate lenders, and those most willing to lend to motor trade businesses.
Having a large volume of credit stamps on a credit file is often perceived negatively by lenders. This can result in loan offers being charged at higher interest rates, or in applications being rejected altogether.
Options are also available for commercial mortgages on leasehold premises, although the length of the lease (years) at the end of the period of the loan, is often a major determining factor in whether a mortgage offer will be forthcoming.
Mortgage Options
Self-Cert (non-status) Mortgages - Temporarily Suspended!
Mortgage Criteria
- To 85% LTV
- LIBOR or Bank of England based lenders
- Mandatory property valuations
- Limited paperwork requirement
Budgetary Self-Cert Mortgage Rates:
Around 2% above base with accounts, true self-cert more like 4% over base with reasonable credit history, and 6% over base if you have CCJ’s or a satisfied Bankruptcy on your credit file.
Note About Discharged Bankruptcies:
If you have a satisfied Bankruptcy stamp on your credit file we strongly recommend that you request a Certificate of Satisfaction before you apply for a new retail mortgage.
The process is very easy. Simply apply to the Court who issued the Bankruptcy and pay the small charge.
The process takes 4 weeks to complete, and all lenders need to see your Certificate of Satisfaction before extending you a mortgage or loan.
Status-Based Mortgage Options
The lending criteria for status-based commercial mortgages is almost always more rigid than self-cert products, although there is some level of flexibility for larger purchases (chains etc), or where the applicant has a strong track record in a retail car sales business.
Mortgage Criteria
- Typical maximum 70-75% LTV
- Extended LTV’s available (conditions apply)
- Require valuations (property and business)
- Additional security may be required
- Business plans and accounts often required
Additional options exist to build structured finance for refurbishment projects, or special situations.
Budgetary Status-Based Mortgage Rates
Rates amongst the Banks vary for car showroom mortgages, but start at around 1%-1.5% over Bank of England Base Rate, and scale up to around 6% over Base depending on the perceived risk of the venture.
For Help Securing Your
Car Showroom Mortgage
Call TAL Commercial Today
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