UK Commercial Factory Mortgages

Experience and advice to clients in respect of structuring commercial property deals such as commercial mortgages for Warehouses and Factory units.

Our commercial property mortgage consultants all have backgrounds in the banking sector and can offer added experience and advice to clients in respect of structuring commercial property deals such as commercial mortgages for Warehouses and Factory units.

Acceptable security

Almost all commercial warehouse and factory property is acceptable.

Commercial Factory Mortgage Application

We have access to a wide range of commercial mortgage lenders, with some offering Adverse Credit Commercial Mortgages enabling us to match the client’s UK Commercial Factory Mortgage requirements to the most appropriate lender. At Sterling Capital Reserve, we are able to source a wide range of innovative and competitive commercial property finance packages, secured against investment property, factories and offices, warehousing and storage, hotels, pubs and restaurants, care homes and professional practices.The financial information that we will need to support a mortgage application is as follows:

  • Last 2 years Audited Accounts
  • Latest Management Figures
  • Profit & Loss Forecast for next 12 months
  • Last 6 months business bank statements
  • Brief CV/profiles of partners/directors
  • Asset/liability statements of applicants

Case Study 1 - Refinance of Office and Warehouses - £900,000

Area - Offices and warehouse in prime West London location.
Applicant company is involved in the design and installation of audio visual systems. Also, hire out equipment and manage live functions, involving the usage of 'state of the art' presentation equipment.
An established, expanding and highly profitable business. The key director was looking to 'tidy up' a number of borrowings and also to undertake a small property development.

Incumbent bankers were not attracted to the property development aspect.

Commercial Factory Mortgage Solution

  • Sterling arranged a mortgage of £900,000 on security value £1,300,000 (69%), over 15 years at bank base plus margin 1.5%. As well as delivering the client the amount of funding required, and on better terms, 'surplus' security his existing bank held was released back to the client.

Case Study 2 - Factory & Offices - £420,000

Area - Our client was undertaking a Management Buy Out of an established £2 million turnover manufacturing business based in Portsmouth.
As part of the funding package, we arranged a stand-alone mortgage on the business' freehold factory premises.

This was ideal for the client as an Invoice Discounting facility was being provided by another funder, secured on the book debts with a Sale and Leaseback facility on the Plant & Machinery arranged with a third specialist funder.

Commercial Factory Mortgage Solution

  • The client had a range of funders, as opposed to having all his eggs in one basket.
  • The mortgage was arranged over a 15-year term, at bank base plus margin 2%.

Case Study 3 - Purchase of Modern Factory Unit - £210,000

Area - Purchase of new industrial unit in Northampton
Our client had been in rented accommodation but with a rent review looming was looking to buy his own freehold unit.
The client had sufficient funds in his Personal Pension Plan to enable us to arrange a mortgage to the Trustees of the Pension Fund. A lease was then created to the client's trading business, with the rent charge covering the mortgage repayment.

This was a very tax efficient way of purchasing the property.

Commercial Factory Mortgage Solution

  • Sterling arranged a mortgage of £210,000 (70% of purchase price) over 15 years, at bank base rate plus margin 2%.

Case Study 4 - Refinance of Food Processing Factory - £850,000

Area - Refinance of Freehold Factory site in the West Midlands housing a Food Processing Production Line.
The client's previous company had gone into Receivership, due to some unforeseen 'extraordinary' events, all combining at the same time.

However, the Receiver had allowed the client to form a new company and 'leaseback' the main factory site. 12 months on, the New Company was trading very well and Sterling arranged a mortgage facility to enable the New Company to buy the factory premises and therefore repay the indebtedness to the previous company's bankers.

Commercial Factory Mortgage Solution

  • £850,000 over 10 years with Bank base rate plus margin 2.5%

Case Study 5 - Property Development Facilities - £400,000

Area - Development facility to purchase and refurbish 'redundant' hospital buildings, to create 5 factory units for letting out in the East Midlands.
Client had option to purchase, and subsequently obtained planning for change of use, which significantly increased the value of the site. As the latter is located in a newly built, prime residential area, the client had managed to pre-let the units, at a total rental of £80,000 per annum.

Total project cost £480,000 including initial acquisition cost. Projected value £700,000.

Commercial Factory Mortgage Solution

  • Sterling arranged a development facility of £440,000 to be transferred to a 15-year mortgage at completion, at bank base plus margin 2%, ie client's cash input restricted to £40,000!

All cases are supported by professionally prepared credit applications, thereby significantly enhancing the chances of our clients securing the optimum financial package. Unlike some of our competitors, we do not believe in up front charges. Our fees are only payable when our client has received a formal offer of finance.