As we prepare for the coming year, many professionals are keeping an eye out for new ways to add value to their existing client relationships. Support your clients by facilitating an introduction to an experienced commercial mortgage adviser, leading the way to a reduction in annual interest costs and/or additional funds being raised.
If your client’s commercial lending facility has less than 1 year to expiry, you may want to suggest they review funding options available in the market. Refinancing a commercial loan early gives your client certainty of funding for their business, and mitigates the refinance risk where an incumbent lender is tightening credit policy e.g. debt secured against non-essential retail and hotel assets during the pandemic.
Traditionally, borrowers sourced their own finance by approaching their existing provider of banking facilities, accepting the commercial rates and terms offered. In most circumstances, borrowers will not have the cheapest rates available. If your client is currently with a high street lender, they may also not have secured the leverage they originally aimed to achieve.
In the past 5 years, there has been an evolution in the sourcing of commercial mortgages in the below £10m lending space. High street lenders and challenger banks have adopted a broker-led sourcing approach where commercial mortgage advisers not only introduce the transaction but package the loan on behalf of the bank, from preparing Asset & Liability schedules to collating ID and tax documentation. The cost of the commercial mortgage adviser is typically now paid for by the lender.
Commercial mortgages are underwritten on a bespoke basis and what qualifies can be somewhat flexible. Utilising the experience of a commercial mortgage adviser who can present your clients’ circumstances in a clear and professional way, can significantly improve their prospects of obtaining a commercial mortgage with a new lender.
When it comes to a commercial mortgage there are no set rates with each loan priced on a bespoke basis, with rates sometimes revised down upon negotiation. An example of a loan secured against a property portfolio at 75% LTV, a client would expect pricing to be from 1.74% over Base (as at 5th Dec 2022). LCM Brokering has a panel of over 155 lenders and can source commercial finance up to 80% LTV albeit at higher rates.
We have considerable experience in assisting accountants identify opportunities within their client portfolio. If you are an accountant looking to build a long term and trusted relationship with a commercial mortgage adviser, then please leave your details below.