Commercial Mortgage Application Process
A commercial mortgage application is processed and assessed very differently to residential mortgage applications. Many more factors are taken into account before even an "Agreement in Principle" is released by the commercial lender.
We have written this page to be used as a guide for those who are embarking in the process of securing commercial property finance.
Before going to any particular commercial lending source it's important to look at the financial profile of the Business (and its Directors), and review any supporting business plans, forecast projections etc.
(If you don’t have any such plans then you need to make a decision to either produce them, or look exclusively at Self-Certified Lending options where they won’t be required.)
In all, this assessment is a quick process that if performed upfront, will save days, weeks or months of time during the application stage of the process.
Two Part Assessment
Whilst the process of securing commercial finance is quite involved and time-consuming, much of the work is done after Stage 1 (below) has been completed.
If you have selected a high quality and responsive commercial mortgage broker they will ensure that you know what information you will be required to produce, and at which time in the process it will be required.
Part 1 Basic Assessment
The first part of the lender selection process is to analyse some basic information. The information can be collected very quickly, and this may just be a short phone conversation.
Factors to be considered
- How soon the finance is required
- Company/Directors' credit history
- Length of time in business
- Directors' Industry Experience
- Declared profitability of the company
- Use of the property
- Source of the deposit
Part 2 Selecting the Lending Source
Self Certified Commercial Lenders
Status Based Comercial Lenders
It's typical for commercial mortgage lenders to use online application forms which your Broker will access to input your details.
Following submission of your basic details, and often protracted negotiation with the lenders, an "Agreement in Principle" will be produced. This will include a detailed list of supporting information that will need to be provided to complete the process.
Each lender has a unique, paper-based commercial mortgage application form which will need to be completed in full, and signed where requested.
Depending on the lending source, the questions contained will either be quite high-level, or very detailed.
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