SLJ Commercial Finance offers a very personal and ‘hands on’ service and will
remain very close to the transaction from the initial discussions to draw down
of the borrowing, liaising with all relevant and interested parties. These would
typically include; the client, lender, valuer, solicitor, general insurance
broker, independent financial advisor and perhaps mortgage broker.
The
commercial mortgage process begins with…
An Initial Discussion – at this
stage basic information is obtained and usually via a telephone call. It is
often the case that at this very early stage of the process it can very quickly
be established if the proposal is viable. Also it is at this stage that terms of
engagement are agreed, that is what fees and costs are likely to be
incurred.
The next stage, is to…
Gather Detailed Information – This is
normally undertaken by way of a face to face meeting at the clients premises.
The information required will vary depending on the nature of the transaction
and will typically include;
The above list is not exhaustive and other information such as Experian Reports or detailed building/refurbishment costs may also be required.
It is also at this meeting that Terms of Agreement between client and SLJ Commercial Finance are signed and agreed. SLJ Commercial Finance is a full member of the National Association of Commercial Finance Brokers and operates under their Code of Conduct. The wording for the Agreement was formulated by the NACFB and has been registered at the Office of Fair Trading.
At this stage all of the information is analysed and the proposition formulated. It may be necessary to produce a Business Plan to support the Application, especially where the purchase is actually a business (e.g. An hotel, public house, shop etc) and SLJ Commercial Finance is very experienced in this connection.
A decision will then be made with regard to which lender is considered to be the most suitable provider.
Following which, the next stage is to…
Complete the Proposal – lenders often have a myriad of forms that require completion, such as an Application Form, Assets and Liabilities, authority to undertake Credit Reference Searches etc. SLJ Commercial Finance is very accustomed to completing all of the necessary documentation and then submitting all relevant information to the most suitable lenders. This will result in obtaining, an….
Offer Letter – this will detail the terms and conditions attached to the commercial mortgage. Occasionally an Agreement in Principle (AIP) is obtained rather than a full Offer Letter. This will usually outline the main terms and conditions and would normally be obtained before a professional valuation of the property is undertaken. Thus the cost of a valuation is only incurred once an AIP has been obtained.
Professional Valuation – All lenders will require an independent assessment with regard to the value of a property and will generally appoint a firm with the requisite skills and professional qualifications to produce a report on their behalf. Most lenders will use the services of a number of firms and will select one from their panel. Assuming that the valuation is satisfactory then this will lead to the issue of a formal offer letter.
Assuming that the client is comfortable with the terms, then the next stage is to…
Formally Accept the Offer – Some lenders require payment of a Commitment Fee when accepting the offer which in effect forms part of the lenders Arrangement Fee. It is usually refundable if the lender decides not to proceed for whatever reason, although not if the client subsequently decides not to go ahead. On receipt of the Accepted Offer letter lawyers will be instructed and the process then becomes a legal one. Clients and lenders lawyers liaise to ensure that all Terms and Conditions of the loan are fully met before completion at which time the commercial mortgage is drawn down.
Time scales vary considerably but are not dissimilar to a domestic house
purchase.
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