When you first decide to take up Commercial
In the UK, most Commercial Lenders will require up 75% of the value of the loan. You will need to come up with as much as possible to secure the loan. The items you put up to secure the loan will be confiscated by the Commercial Lender should your fail to honor the terms of the loan. Let’s look at each of the things that can be used and how they work.
This can be in the form of residential property owned by the principles involved in the business. It can also be existing commercial property that is owned by the business. Finally, it may also include the property you are purchasing, if the Commercial
When you put up property to secure the loan, the lender will be looking at the equity value of the property first and the total value of the property second. They will also look at the payment history of any property that has not been paid for outright. When the lender has finished looking at the property you have, they will look at your account receivables.
The amount of revenue generated on a regular basis. This can be weekly, monthly, quarterly and even annually to see if the income is there to support the payments on the Commercial
The degree to which this is helpful will depend on the type of commercial
The parts that you would use to keep them running could not be used to secure commercial
If your business is a factory, you could use the equipment you use to make the product you sell to secure commercial
This does not mean that short life-span materials cannot be used, but they are counted as general inventory in much the same way as office supplies would be. You need to keep in mind that anything you use to secure the
This is because some equipment, in some industries, out date very quickly and loose value very quickly as well. If you work primarily with computers, your equipment and software will be outdated and worthless long before a loan would be paid off. Factory equipment, on the other hand, will still retain its value many years after the Commercial