Commercial Mortgage Deposit Amounts
In recent years the average size of commercial mortgage deposit has started shrinking. Pre-2008 when the credit crunch happened, some lenders were allowing borrowers to borrow at much as 100% of the value of the property.
As widely reported, the credit crunch sent the amount of deposit business owners required rocketing up to 50% of the value of the property they were looking to purchase. Thankfully this dropped fairly quickly, to most lenders requiring a 35% deposit.
Now we are 8 years away from the initial crash and credit crunch we have lenders starting to loosen their criteria. Our typical required commercial mortgage deposit is now 25%, which helps many more businesses invest in their own premises.
Strategies For Raising A Commercial Mortgage Deposit
Many business owners presume that a commercial mortgage deposit must be in cash in the bank, however there are numerous other strategies for raising the deposit.
Releasing Equity In Another Property
One of the most popular methods of raising a commercial mortgage deposit is by releasing equity in another property as cash via a remortgage.
Security Against Collateral In Another Property
If you have another property, you may be able to secure your new premises against your other property. This can mean though if you default and the property is sold, your other property is at risk.
Raising Finance To Cover The Commercial Mortgage Deposit
A very popular strategy is to take out a business loan to cover the amount of the deposit. This can be risky as a new credit application after receiving a commercial mortgage offer, could result in the offer being withdrawn. Strategy and timing of rising both sets of finance is key.
Find Out How Much Deposit You Need For A Commercial Mortgage
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