Commercial mortgage

A potential scenario of how a commercial mortgage could help

If a customer had secured a one-year option on a greenfield site to give him time to obtain planning permission for a residential site with several properties, it could be a difficult and time-consuming planning application.

There might also be company cash tied-up in several other land acquisitions, and so it might not be possible to proceed with the land purchase and construction. Planning might be granted but the option period could be very tight.

Also, if the land value increased once planning was approved, there could be a risk the vendors try to squeeze more money from the sale, or even sell to someone else. In this kind of scenario working fast would be paramount.

In this scenario we could help the customer create a business plan and detailed financial appraisals. We would then approach our specialist commercial and development lender panel to source the best solution. The excellent relationships we enjoy with underwriters mean we could also look to secure an ‘in principle’ offer for the funding within days.

Assuming the land acquisition costs were also released immediately – this could ensure the land is bought within a deadline. We could then work with the lender’s quantity surveyors and underwriters to agree a schedule for the costs to allow construction to start.