Option to buy your freehold?
With the major PubCos reviewing their estates, recent years have seen many tenants being given the option to buy the freehold to their business, thereby swapping rent for a mortgage and removing themselves from an onerous beer tie.
We have helped many with arranging funding and guiding them through the process to complete the purchase.
The key point for us is that in most cases the marriage of the property purchase to your existing goodwill and inventory invariably means that the business as a whole is worth more than the price you pay for the property.
We work specifically with lenders who recognise this factor and who will lend on the value of the business not just the price you pay for it. This means that subject to satisfactory valuation then you may need little or in some albeit rare cases no deposit.
This is particularly true where you have already paid a substantial premium for the goodwill .
- Property purchase £300,000
- Assumed value of the business as going concern £370,000
- Maximum loan £240,000 (maximum 65% of the value of the business)
- Current interest rates circa Bank Base + 3.5% so loan repayments on this would be around £1,420.00 per month over a 20 year term (Bank base 0.25% at the time of writing)
The lender will require 2/3 years accounts for your business to assess whether the business can meet its requirements for the servicing the loan and your own drawing requirements.
The key points here are that when considering the accounts your rent will be added back to the bottom line and they will allow an adjustment on the gross profit to reflect buying without tie.
Everyone’s situation is different so in the first instance do not hesitate to call us to discuss your proposal.
Call Michael or Roger on 01834 849797
Business Mortgage Solutions is a member of the National Association of Commercial Finance Brokers and is regulated and authorised by the Financial Conduct Authority
Buying a pub with poor or no accounts?
Tenants, option to buy your freehold?
“Just wanted to say a huge thank you for all your assistance with this. If you guys want any references or reviews we would be only too happy to provide a glowing one for you.”
“The service provided by Business Mortgage Solutions was truly excellent but most importantly expert and we really appreciated it. If we were to ever do this again we would definitely go through them again and indeed we have already recommended friends use them. ”
“We are very grateful we contacted you. Without your help and expert guidance we would not be happily trading at the Trout Inn in Beulah and forging a good future for ourselves”
Dave and Heather Saunders
“Dear Michael. Thank you for your help without you we would not have the Guest House.”
“Thank you for all your help, I will put a chq in the post for you. Thanks Mike. From all is us at Beach Break Tearoom.”