Finance shaped by experience
Commercial mortgage arranged for an established engineering fabrication business
ACQUISITION OF AN EXISTING OPERATING PREMISES
The situation
An established family engineering business approached Expert Finance after the opportunity arose to purchase the commercial unit the company had been operating from for a number of years.
The business specialises in engineering fabrication and welding and had built a strong reputation locally since launching in 2013. The company had traded successfully from the premises for over a decade and the building had become an important part of its operations, supporting workshop space, equipment and staff.
When the opportunity arose to acquire the property from the existing owner, the directors wanted to explore whether the business could secure a commercial mortgage and bring the premises into long-term ownership.
The agreed purchase price for the property was £560,000, with the business seeking funding at around 75% loan to value alongside a further facility to support planned works and investment in the unit.
The approach
The starting point was understanding the business itself. With over ten years of trading history, the company had established turnover, a consistent customer base and a clear operational need for the premises.
The funding needed to reflect both the strength of the trading business and the purpose of the property within the business’s operations.
Expert Finance worked through the transaction by presenting the full commercial picture to lenders, including:
• the trading history of the engineering business
• the operational importance of the premises
• the affordability of the proposed borrowing
• the structure of the property purchase and ownership
By positioning the case around the underlying strength of the business and its long-term use of the premises, the application could be considered on a commercial mortgage basis suitable for owner-occupied business property.
The outcome
Funding was structured to support the acquisition of the premises together with a further facility to assist with improvements and investment into the unit.
This allowed the business to move from operating within premises owned by another party to securing long-term control of the property it had already been trading from.
For the directors, owning the premises provides greater stability for the business and the ability to invest further into the site as the company continues to grow.
Considering purchasing the premises your business operates from?
For many established businesses, buying the property they operate from can strengthen the long-term foundations of the company.
If your business has the opportunity to acquire its premises, Expert Finance can help structure the funding around both the property and the trading business behind it.
Start the conversation today.