Borrow Against 100% Of Goodwill – Larger Commercial Loans And Lower Rates
4th January 2024
By Alex Walker
In the realm of commercial property investment, there exists a game-changing financial product that many entrepreneurs and property investors are yet to fully grasp. Today, we will delve into the intricacies of a remarkable offering that has the power to transform the landscape for businesses with substantial goodwill, a concept often overlooked by mainstream lenders.
Understanding the Significance of Goodwill
Goodwill, in a business context, refers to the intangible value attributed to a company due to its reputation, customer base, and overall standing in the market. Also it’s profits. Traditional lending institutions usually disregard this element when evaluating a property’s worth. However, there are scenarios where businesses possess significant goodwill, elevating their overall value. Imagine acquiring a corner shop for £300,000, with an additional £100,000 in goodwill. Typically, lenders would only consider the property’s physical value. But what if you could borrow against both the property and its goodwill, effectively increasing your borrowing potential?
Consider a thriving restaurant valued at £400,000, with a goodwill value of £200,000 due to its exceptional success and income generating capability. Instead of borrowing against the standard £400,000, this innovative financing solution allows borrowing against the combined value of £600,000. At a standard 75% loan-to-value ratio, this translates to an additional £150,000 in borrowing capacity. The impact on investment properties is equally remarkable. Even a vacant property with a strong lease can significantly benefit from this approach. While most lenders evaluate based on vacant possession, this unique solution recognises the income-generating potential of leases, often leading to higher valuations.
Unveiling the Game-Changing Lender
Recently, a pioneering lender emerged, recognizing the value of goodwill in commercial properties. Unlike traditional lenders, this institution incorporates goodwill into its assessments. An enlightening example showcases a property valued at £490,000, with £265,000 attributed to goodwill. Conventional lenders offered £168,000, reflecting 75% of the bricks and mortar value. In contrast, this innovative lender extended a staggering £343,000, nearly double the amount, at a lower interest rate. This substantial financial boost, coupled with reduced interest rates, underscores the immense potential of this financing avenue.
The Unique Advantages of Goodwill
What makes this product truly extraordinary is its affordability calculations, competitive interest rates, and, most importantly, the ability to secure significantly higher amounts of funding. Affordability and loan-to-value considerations align favorably for borrowers, resulting in more substantial financial support. In essence, borrowers require a far lower deposit, making ambitious property investments within reach or cover additional costs such as stamp duty.
Embracing the Future of Commercial Property Financing
In conclusion, this financing solution offers a lifeline to businesses and investors with substantial goodwill. Whether you operate a corner shop, a successful restaurant, or own commercial investment properties, this option unlocks unparalleled financial potential. Its ability to bridge the gap between tangible assets and intangible value sets a new standard in commercial property financing. As awareness spreads, more businesses are poised to benefit, propelling them toward greater success. Don’t miss out on this financial revolution. Explore the possibilities, understand the advantages, and seize the opportunity to transform your commercial property ventures. For more information you can explore our website ,YouTube channel, or contact us by calling 01902 585020 today!
Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.
More than 50% of borrowers receive offers better than our representative examples
The %APR rate you will be offered is dependent on your personal circumstances.
Mortgages and Remortgages
Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66
Secured / Second Charge Loans
Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20
Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME
REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG
Authorised and regulated by the Financial Conduct Authority – Number 681423The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.