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90% finance

Terri F
Posts: 12
20/10/2009 22:56:41
Hi is it possible to get 90% finance now on a freehold business? It's being marketed at £145K, with turnover of £60K, adjusted net profit of £20k. This is on really short hours, approx 34 per week, I would plan on doubling these & extend the range that is sold. It would be family run so only ourselves to be paid. It has living accommodation so I would rent out my house as there's not enough equity in it to sell at the moment. While mortgage rates are low, the probable rental will give me around £400 per month excess after the mortgate & buildings insurance is paid.
Any advice greatly appreciated.

1 Reply
Martin Hagan
Posts: 1
21/10/2009 21:18:15
Hi Terri,
I hate to shatter your hopes,but here are my thoughts.
If the business is being marketed at 145K,a quick mark-down of say 20% brings it down to 115K.In a fire-sale,the bank will mark it down say another 20%; i.e. to around 90K.
In considering your application,they will also factor in their "risk", as well as their generous expenses to sell the business on (should you default), as well as a healthy profit for themselves.Taking the current climate into consideration, I feel that you would be doing very well in being offered a 50% L.T.V (Loan to value)mortgage-unless you can offer some equity in,or re-mortgage your own property.
I hope to be way off here and I'd love to hear from you when it all goes through.
Best of luck,
Mart.

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