How Long Does It Take To Arrange A Commercial Mortgage?

If your company requires finance to purchase the likes of a new business premises to occupy then one of the most popular ways of doing this is to apply for a commercial mortgage. A commercial mortgage is provided by banks, building societies, peer-to-peer lenders as well as other specialist commercial lenders.

A question that often comes up during discussions with prospective clients is; “How long does it normally take to arrange a commercial mortgage?”

Well, the answer is that such complex borrowing can usually be arranged as quickly as the borrower requires it within reason. Realistically, if you made enquiries of a lender today, you are not going to be able to do all that is necessary by way of paperwork, submit your application and get a response in order to be able to draw down on the commercial mortgage the following day.

As a minimum, if “all the stops were pulled out” by all parties, you can usually expect a commercial mortgage application to take at least a couple of weeks before everything that needs to be done has taken place, the borrowing is available to draw down and the monies have been released so that the purchase of the new business premises can take place. However, it could take a lot longer. There is a lot of paperwork required but that should not come as a surprise when you could be talking about a borrowing requirement running into millions of pounds.

Commercial mortgages may only take a fortnight to arrange but could take a lot longer
It may only take a couple of weeks to arrange a commercial mortgage but it could take a lot longer.

For instance, you will need to complete an application form for the commercial mortgage that may include the provision of a business plan incorporating a cash flow forecast, the last three years audited accounts, up to date management accounts and projected trading and profit and loss account/balance sheet. A valuation/survey will need to be undertaken by a qualified surveyor/valuer. The lender will need to complete their assessment of the commercial mortgage application. Legal work will need to be completed.

It is better to plan as far ahead as possible when considering applying for a commercial mortgage and avoid the need to rush things. By allowing sufficient time to gather all the necessary paperwork for the lender and making sure that all the information requested is available first time should help to create a favourable impression with the prospective lender and enhance your chances of getting a positive result.

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