Borrowers seeking investment loans are usually either going to be an owner-occupier or an investor looking to let the property. The commercial investment loans that can be secured will vary depending on which category.
Owner-occupiers will service the loan repayments from the profits of their business and this means that lenders will need to complete due diligence on the business and its trading history. Lending facilities can still be obtained if it is a new business although this may be at lower levels of gearing and will be achieved only with a strong business plan and team in place.
Investors looking to purchase properties for a return will service loan repayments from the income of the property. This will mean that lenders are focused on how much income is achieved in relation to the repayments of their loan. Commercial and residential investment loans have different repayment requirements and lenders will also review the costs involved for maintenance, insurance and service charges. Furthermore, the tenant profile and lease are a key focus for lenders to ensure that the income is secure in order to repay the loan.
Generally, in either category of borrower, loans of up to 65% loan to value can be achieved but in certain cases this can increase to 75% depending on the strength of the location, asset and borrower.