The little signs that we are waiting to see, the green shoots or lenders being more confident when asked initially about a proposal are just not there. The demand for COMMERCIAL MORTGAGES is very strong despite what is a very difficult market and clients who still want to borrow to start a business or to expand an existing one are building up as the supply does not match the demand.
The very strong demand for Commercial Mortgages Finance and Business Loans augurs well for the future of businesses as despite the general doom and gloom that hangs over the country there are so many people who still want to borrow money for business purposes.
The strange thing is we have lots of Investors who want to lend to the right proposition and are more than willing to get involved in new proposals and help the existing ones to expand. The Investors are currently filling the very large black hole in COMMERCIAL LENDING left by our high street Banks.
The growth of short term finance and bridging finance seemed to be the start of the change of lending from high street Banks to the more specialist lenders, and then closely followed by the Investors who have taken up where the Banks have left off, and have keep the market alive and glowing with the pent up demand.
We do need to see a return to normal lending sooner than later otherwise many clients will just give up and go abroad to try their luck and we as a nation will lose out on the next generation of entrepreneurs who will keep this great nation of ours at the front of world affairs and help us of the current credit crunch, with the loss of access to COMMERCIAL MORTGAGES FINANCE AND BUSINESS LOANS.
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( 2.9 / 128 )As the budget news comes through are we seeing any real news of help to our clients who are desperate for the high street banks to open the doors for normal lending on COMMERCIAL MORTGAGES, FINANCE AND BUSINESS LOANS.
Well as we speak Mr Darling appears to have the red brief case closed to Commercial Mortgages, and seems more concerned with ISAs and increasing the income tax rates, and how to screw more money out of the British public to pay for the bailout of the banks.
Please Mr Daring we need some help, you have not finished speaking yet so for gods sake remember that without businesses growing and employing people the country cannot go forward and help us get out of this deep and dark place.
Commercial Mortgages, Finance, Business Loans that’s what we need, and if you have still got the time Mr Darling and I just hate calling you that because to date you have not performed in the manner your name would suggest, so please be a darling and give the money wheels a good oiling and lets get lending again PLEASE.
Michael Alexander
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( 3 / 130 )What can we look forward to this week as we have the budget on this Wednesday to see what delights Alistair Darling has to offer us, could it be deportation to Australia, a good flogging, 20 years in a nice cosy prison or even worse we have to stay here and be taxed to a very slow death to pay for the bailout of the banks.
Australia here we come, but of course they are very choosy who they let in, so perhaps we would not qualify any more.
On Friday the Footsie 100 finished up above the magic 4000 mark which is a good sign, and some of the banks led the way with Barclays looking very good. In the past it has been the small cap companies who have led the charge out of recession, and I think we can see the same recipe working in the future as the small cap companies are more nimble on their feet, and have slimmed down in the last eighteen months and are now lean and mean and well placed to take advantage of any signs of recovery however small.
These maybe pin pricks of light in a vast black sky but it is a sign of the times when any tiny sign of light has us all getting excited, that this maybe the start of a movement in the right direction.
These small signs should not be discounted but the real problem that is holding back any real recovery is the lack of funds that are available to clients in business who want to go forward. Despite the much heralded government schemes that are supposed to be in place to help the small businesses to recover and grow out of the current situation the river bed still remains dry and dusty.
What a massive difference the flow of COMMERCIAL MORTGAGES, FINANCE AND FLEXIBLE BUSINESS LOANS would make to the market stuck in a log jam of banks looking over their shoulder at the FSA and the credit committee who seem to take a great delight in saying no when with a slight move to the right we would all have a smile on our faces once more,
It is not the fault of the clients of the banks that they are in this position; banks have not been known for their generosity in lending to business. The problem has been the blocks of sub prime business that came in via the back door with no proper vetting or underwriting, just the seal of approval by a rating agency. And who employed the rating agency ?
The price we are now paying for this complete and utter madness will stay with us for many many years and no doubt our banking fiends have either found other jobs or they can retire with their big fat bonuses paid for as the price of failure. In what other Industry could this happen, and they walk away still smelling of roses and pots of money.
The banks that are lending in the current market have placed certain restrictions on the MORTGAGES or LOANS being granted. With all the COMMERCIAL MORTGAGES, FINANCE, AND BUSINESS LOANS that are being granted the margins above BOE have increased, and in some cases lenders are looking to use LIBOR as the basis of the calculation which again means higher interest rates for the client.
The fee structure again on COMMERCIAL MORTGAGES FINANCE AND BUSINESS LOANS have been increased, and as most of these are added to the loan the client may not be aware of the change in the fee structure. From a COMMERCIAL MORTGAGE BROKERS view it means that we have to be careful that the client fully appreciates the total fee structure and in some cases lenders are not willing to pay the COMMERCIAL MORTGAGE BROKER a fee but still charge the client the same fee as when they were paying fees to intermediaries. Another nice little earner for the banks and the clients are no wiser.
Lending should be about clarity and transparency, but some lenders appear to be determined to claw back their losses and repair the balance sheet at all costs, and it’s the client who pays.
However we remain constructive and talk up the markets and try to be as positive as possible even if it does not appear to be getting any easier to obtain the life blood of our Industry, a transfusion in terms of access to COMMERCIAL MORTGAGES FINANCE, AND BUSINESS LOANS IS CALLED FOR TODAY, Mr Brown, are you listening ?
Michael Alexander acommercialmortgage4you.co.uk.
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( 2.9 / 113 )The banks seem to have made a rally on the Footsie 100 and the shares have made a small recovery from their very lowly position as the market has shown signs of a slow down in the fall of property prices.
It’s a sign of the times that even this very small sign we take as a positive when the market in general knows it will be the end of this year before the property market bottoms out.
The residential market still has around 8% to fall if the predictions are correct, but the COMMERCIAL PROPERTY market is harder to call. The auction houses are very busy as the bargains hunters are out in force, but looking to buy at way below the current market value, which does not help the COMMERCIAL PROPERTY market in recover.
Finance in the shape of COMMERCIAL MORTGAGES FINANCE AND LOANS, is still not becoming any easier as lenders are still very cautious of getting over exposed in certain areas, and look for very profitable low risk business, with good cash flow.
While the lenders remain so picky about where and to whom and in what sector, and low loan to value its going to be a very cold summer this year so get out your winter warmers nice and early.
In financial services we all want to be positive and talk the market up because that’s what we are very good remaining positive in a market down turn and still battleling to arrange COMMERCIAL MORTGAGES AND FINANCE for our clients however tough the going gets.
It will get better and today maybe we have seen the first signs of the attitude to the banks changing which can only be good for MORTGAGES AND FINANCE in general
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( 3 / 115 )Where would we be without the saviour of the COMMERCIAL MORTGAGE market, short term finance? There are so many property developers who have taken advantage of the short term finance facilities that are available and taken an early summer holiday to lie on the beach and wait for the property market to come back.
The market tells us that property prices are still falling and may continue to do so until the end of this year when we expect that the market should have bottomed out. We could see a bounce in the market this year if we get lucky, but the New Year should bring the change that is long awaited with prices going up.
There is a massive pent up demand to purchase as so many people who want to buy, but are unable to do so because lenders are not lending to anyone who does not have a 10% deposit and is 100% squeaky clean, and as we all know that takes out a large slice of potential buyers.
Once lenders and valuers can see the market turning around in a sustainable form lenders may then open up the bank vaults and start lending in a normal fashion. There maybe another problem in so much as staff have been cut to the bone and if lenders suddenly get busy how will they cope.
However, this is a nice problem for lenders to have, we just need lenders to be saying ‘yes’ to our COMMERCIAL MORTGAGE applications and get the market moving. We need to see some good old builders bums on site again then we will know we are getting back to normal.
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( 3 / 122 )Most of our commercial lenders are now looking at 70% LTV for commercial mortgage for ownership and 60--70% LTV for Investment commercial mortgages.
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( 3 / 125 )In this market where COMMERCIAL MORTGAGE lenders appear to have gone on a long summer holiday with no date of return COMMERCIAL MORTGAGE BROKERS are running around trying to put proposals together for clients with not a great deal of help from our High Street lenders.
The frustration for clients and brokers is vast at a time when some business people can see the opportunities there to build on their current business or start a new one and the banks have shut the door to anyone that is not a blue chip case.
This is where your COMMERCIAL MORTGAGE BROKER will almost certainly earn their fees twice over and by using contacts built up over a long period of time to be in a far better position to help you obtain your COMMERCIAL MORTGAGE where you may have failed.
The presentation of your proposal to the lender is very significant in the process of acquiring a Commercial mortgage. What lenders and the dreaded credit committee do not like is underwriting a case on the drip feed of information.
Lenders are asking for a great deal of information now in order to consider a case, which may at times seem a little over the top, but by going that extra mile and giving the lender every possible bit of relevant information up front you are increasing the chances of success by a very big margin.
Commercial Mortgage lending is changing and we are seeing private equity groups coming into the market with groups of Investors and Trust fund money. This makes life very exciting for any COMMERCIAL MORTGAGE BROKER as we are now able to structure deals where the client may be short on the deposit funds required up front or may need some further help in obtaining funding on top of the High Street Bank in order to complete the development by way of mezzanine finance, prior to an on going sale or refinance by a long term lender.
We can no longer look at the High Street as our only form of obtaining finance as there is a vast array of funding from various sources that we can use to achieve our objective.
Loans to value have become tighter as lenders feel more comfortable with the lower loans to value which in banking means lower risk. They seem to be happy at 70% LTV for most proposals and in some cases a little lower depending on the type of security being offered.
As you may gather from most of the broadsheets and the red top newspapers, the leisure industry and retailers have been hit very hard by the down turn in the markets and lenders are naturally very cautious in lending to clients where the future is uncertain.
However, in any down turn there are clients who have been prepared for the fall in sales and see the opportunity to make money as we come out of the current gloom and doom.
We must always try to look round corners when our clients come to us for help in arranging a COMMERCIAL MORTGAGE OR FINANCE rather than just saying ‘no’, as most lenders tend to. If the business has been well run and has shown good profits in the past and has the ability to trade out of the dip then we should look at every avenue of finance to try and put together a COMMERCIAL MORTGAGE package that will help the client to go forward which in the end helps us.
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( 3 / 187 )With the residential housing market showing signs of a small recovery with mortgage applications up around 4% in March has there been any good news on the COMMERCIAL MORTGAGE front.
With HSBC coming out with a pledge to lend at 90% LTV for residential property are they offering the same hand of friendship to their COMMERCIAL MORTGAGE customers.
You would think that the two would go hand in glove would you not. If we do not support businesses where are the jobs coming from to enable clients to take advantage of the offers to get on the housing ladder.
At present there are no signs of any easing of the underwriting of COMMERCIAL MORTGAGES, where if anything what we are seeing is lenders being more conservative in their approach to a proposal and looking for that little extra comfort zone. This could be additional security, personal guarantees, or a debenture on the company. All of which are not ideal for clients but the name of the game in the current COMMERCIAL market is low risk with excellent coverage of the ability to service the debt.
Not good news for marginal cases then and the difference between High Street deals and the specialist lenders operating in the light touch or self certification of income market is light years apart.
If you are drinking in the last chance saloon for your COMMERCIAL MORTGAGE, it is not the place you want to be with interest rates starting from around the 10% mark and going up. With BOE at 0.50% you would be sitting on a time bomb signing up to some of the crazy schemes that spell only one word for your COMMERCIAL MORTGAGE, its disaster.
Its worth hanging on in there and waiting for the market to come back when a level of confidence returns and property prices begin to stabilize, and then we see a return to positive growth, following that COMMERCIAL lending will become so much easier to achieve.
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( 2.8 / 139 )Has the Easter bunny knocked at your door yet carrying a sack full of cash from your not so friendly high street bank telling you not to worry about how to get your much needed COMMERCIAL MORTGAGE or FINANCE? No, not exactly a surprise then but we keep hoping.
We can see that two of the major High Street lenders have not gone to the Government for help so does this augur well for the future, are we going to see a sudden turn around in the market with funds being made available to business?
COMMERCIAL MORTGAGES and FINANCE together with flexible banking is the life blood of businesses going forward with growth and expansion, and with that comes taking on extra staff. Each successive Government has always known that growth starts from the bottom up, with small companies and new starts being the green shoots that are bandied around so much as being the first signs of recovery from a very dark place.
So when our Government poured so much of our cash into the UK banks who began to look as if all the so called experts had ignored all of the rules of common sense and the Banking guide book and acted like the herds of wildebeest rushing into the mouths of the waiting crocodiles, why or why did we not let them go bust, which is what happens to any other business, or impose upon them the strictest possible guide lines as to how some or all of the funds that we have poured in should have been spent?
It does not help business or the Country just to rebuild the banks balance sheets, which could have been overcome by allowing banks to break their covenants for a limited period under very strict control, but start lending NOW.
The people on the boards of our Banks first priority appears to have been to advance their own position and fortune with a complete disregard for the rules under which they are supposed to operate. How can anyone justify the salaries and bonuses being paid for failure, with a golden handshake and a top up to your pension pot when they are finally forced to go?
All our Government have done is put back the very the start of the recovery by denying access to what our businesses need to allow them to grow, COMMERCIAL MORTGAGES FINANCE AND LOANS. How can any business start to think about buying in new machinery or moving premises when the main artery of cash flow has been cut off? They have to have the confidence to take on additional expense and more working hours and without the strength of the bank behind them, they are unlikely to make that giant step.
We are back to the bad old days of the eighties and early nineties with banks calling in overdrafts in the certain knowledge that what may have been a very good business will now have to close because the access to COMMERCIAL MORTGAGES AND FINANCE is being denied. Wake up grey Gordon, if you are the leader of this Country then start leading. A certain line from one of the greatest leaders this country has ever had, Winston Churchill may help you.
“It is no use saying, WE ARE DOING OUR BEST. You have got to succeed in doing what is necessary.”
And I will say it again for you Mr Brown, unless you get our banks lending and lending NOW, with access to COMMERCIAL MORTGAGES FINANCE AND LOANS, we will not be going forward. The question is, how much further back do you want to go before the penny drops?
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( 3.1 / 136 )Why is it that the Banks and other lenders would prefer to lend against an investment property than a property which maybe for your own occupation and from which you can run your business?
It does seem strange does it not when the bank may know all about you and your business, but would prefer to look at a tenanted property as a better long term low risk proposal?
What the banks and lenders are really looking for is a commercial property let to a High Street name on a long term FRI lease with 3/5 year reviews and no break clauses in the lease, and the rental income to service the debt by a margin of 140%.
We do not want much as a bank do we, a platinum plated blue tenant, paying a fantastic rent which will go up on each review and no break clauses to enable the tenant to leave in the interim period.
That puts us in our place because there are not many of these tenants around who tick all the right boxes. In this market tenants want flexibility, and do not want to tie themselves down to a long term lease when their trading positions maybe a little weak. Being able to hand back the lease maybe very important to the client if the going gets tough and they need an exit route.
Commercial Investment property is attractive to lenders and of course there are some lenders who will be a little realistic about the term left on the lease and the quality of the tenant but again risk is king and no lender of any standing is looking for warp factor risk in the so called credit crunch.
While our illustrious politicians may have unlimited expenses and be able to view blue movies at our expense we have to knuckle down to try and find the right investment property that our lenders will look at, or as we are finding in many cases try to find equity partners and share the risk. You will of course be sharing the profit, but that maybe preferable to losing out on what maybe a profitable deal.
You will find that a good commercial mortgage broker is a good source for equity partners, mezzanine finance, and private funding. Will we ever return to business as usual on the High Street, with commercial mortgages and finance being available on normal lending terms, at the right loan to value and an interest rate margin to match? Not in the foreseeable future?
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