If you run a business and need fixed premises, it may be a wise decision to purchase a commercial property. However, if you’re not careful, it can turn into an expensive mistake. Therefore, one of the biggest factors you have to consider while purchasing a commercial property is how you should finance this massive purchase.
To ensure you get the best advice and rate possible on your commercial mortgage, speak to our expert team at Knights Row. We can help find you the best lender for your needs to fund the purchase of the commercial property for your business.
Regardless, you need to be well-prepared if you’re looking to take on a commercial mortgage. Many business owners make mistakes that can lead to the denial of their request. You need to ensure you avoid these mistakes while applying for your commercial mortgage.
We’ve created a list of the top 4 most common mistakes to avoid during the process to maximise your chances of being accepted. A commercial mortgage is a long term decision, and at Knights Row we will work with you to ensure it is the right financial decision for the long term of your business.
Let’s get started!
1. Not Having a Solid Business Plan
If you’re looking to borrow money from a lender, you need to have an effective business plan. These plans should include a detailed description of your business, your target audience and your financial projections and forecasts.
It shows the lender that your business will be fully capable of paying the mortgage, with interest, for the term of the agreement. Without a robust and detailed business plan, potential lenders cannot quantify their risk, making it more unlikely for you to be accepted for your mortgage.
Knights Row can match you with the most suitable lenders for your situation to realise your commercial mortgage. Additionally, we can lend support on putting together your business plan to make your business appear as attractive to lenders as possible, maximising your chances of acceptance.
2. Not Having a Good Business Credit Score
To ensure the best rates and smoothest process, you’ll want to ensure you’ve built a solid business credit score. Unsurprisingly, your business credit score is similar to your personal credit score, but for your business.
If you have a poor business credit score, getting accepted for a business mortgage will be more difficult.
Having a high credit score indicates that you’re a responsible company or owner who pays their debt on time. This is amongst the most important tips for getting a successful commercial mortgage.
On the other hand, if you have a low commercial credit score, it will make it harder to get approved, and may also lead to less favourable terms, including higher interest rates.
Therefore, a good commercial credit score is crucial to a smooth business mortgage application. Knights Row can assess your credit score with you and provide insight into your score. Whilst more nuanced than your personal credit score, paying debt and bills on time and having detailed financial history will typically mean a higher score.
3. Not Understanding the Commercial Mortgage Terms
You must know everything about the terms and conditions of your commercial mortgage loan before you take it. A missed point on your commercial mortgage could prove incredibly costly in the long run. Knights Row are equipped to find you a favourable agreement and help you understand any complexity.
Make sure to double-check the interest rate, repayment terms, and any fees or additional costs. If there’s something you’re confused about, don’t hesitate to clarify with your broker.
The experts at Knights Row can help you with all the details you need to know before you apply for your mortgage. This ensures you have all the information ahead of making a decision, to avoid potential issues in the future.
4. Not Seeking Professional Advice
Applying for a commercial mortgage can be complicated. Because of this, we recommend seeking professional advice from the experts at Knights Row, as well as your legal advisers. It ensures that you’re making the best decision for your business, not just now but into the future.
A broker can help you throughout the process of the application to ensure you’re getting the best deal. An experienced legal adviser will understand the terms of the mortgage and explain them to you to ensure you have all the information you need.
The experts at Knights Row can help you navigate the process and find the right mortgage for your business.
Contact Knights Row for a Commercial Mortgage and Other Property Loans
Now that you’re aware of the mistakes to avoid whilst going through your commercial mortgage application, you may be ready to apply. Knights Row are a leading commercial property mortgage broker, able to find you the best rate for your business.