Loans after Incorporation

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    Loans after Incorporation

    Just coming to the end of a long process incorporating my properties based in London. All studio flats and fully let. Have previous business loans from Lloyds to 35% LTV, however keen to expand and would take LTV up to 60% which I hear is not uncommon.

    Having spoken to a few brokers informally seems as if getting a loan as a limited company is a more expensive and time consuming, but I don't quite trust them. Lloyds would agree to a larger loan but their rates are a bit heavy at 4.9 over base

    Does anyone have any experience on getting loans with a limited company with a large net worth?

    Thanks all!

    #2
    Yes and it is not usually BTL brokers it would be more likely to be a commercial broker you need. Are you sure you were offered 4.9 over base? As that seems high for a large loan if we are talking large numbers that is?

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      #3
      Originally posted by hech123 View Post
      Yes and it is not usually BTL brokers it would be more likely to be a commercial broker you need. Are you sure you were offered 4.9 over base? As that seems high for a large loan if we are talking large numbers that is?
      I'm afraid we are most certainly at +4.9 ... have been for 7 months. Perhaps you could you recommend a broker?

      Very mixed messages from all sources so far, some say its ludicrously high, but even this morning my valuer said it was 'competitive'. As for amounts, portfolio currently standing at 4.1m in the UK.

      Many thanks

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        #4
        I think that is pretty high especially for a reasonable sized portfolio. I too am with Lloyds, I have PM'd you

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          #5
          Hi chk

          The process of obtaining loans through a limited company is not onerous at all providing the broker understands what is specifically being required by the lender in support of the application, if understood and clearly communicated to the client the time taken from submission to approval takes no more time than a vanilla style application.

          There are a number of lenders most of whom have rates, depending on the loan to value in the low o upper 4% range inclusive of any premium above bank or Libor . Completion fees range from a % of loan to a fixed amount , both of which can vary if a fixed rate option is to be taken.

          In all situations you can elect for either interest only or capital & interest.

          Sorry to read of the info being promulgated by fellow brokers but sometimes such individuals know the homeownership residential market very well and fair on vanilla types but come unstuck on corporate applications.

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            #6
            I am not sure if Forum Rules allow me to give the name of a bank - will check back here tomorrow to see if a Moderator answers.

            I do only borrow 35% LTV on part of my company's portfolio but at what I think is a very competitive Libor+2.5%; plus 0.5% on Drawdown. I recently asked them if they would look at higher LTV and was told they would at a "slightly higher" margin.

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              #7
              The basics of the forum rules in relation to what you are saying are that promotion of companies is not allowed, that does not mean that regular members cannot offer recommendations, though frequent recommendations of the same company may be questionable.

              Posts by new members digging up threads which are months old to offer a recommendation will almost always be contrived and so removed.
              I also post as Mars_Mug when not moderating

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                #8
                Having recently been on a similar mission (own 10 properties all containing 3-4 s/f flats) which are personally owned I've been looking at another similar property but would purchase it in a Ltd company structure.

                9 out of the 10 properties are fully paid off so looking to leverage the equity. Most rates for a £400k loan are fixed at 3.99% for 2-5 years and then go for the reminder of the period - 10 years in my case - to anyway from 4 to 5.5% (inc libor)

                I don't tend to touch main stream banks with a barge pole so mainly brokers, some of which are better than others, feedback was that nearly all lenders are starting to realise that BtL will be more common under a company and are adjusting - probably take another 12 months before they all fall in line but you can tell it's starting. At the end of the day these companies still want to sell their product and that will force a normalization through.

                Good luck!

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                  #9
                  Originally posted by MickyV View Post
                  I am not sure if Forum Rules allow me to give the name of a bank - will check back here tomorrow to see if a Moderator answers.

                  I do only borrow 35% LTV on part of my company's portfolio but at what I think is a very competitive Libor+2.5%; plus 0.5% on Drawdown. I recently asked them if they would look at higher LTV and was told they would at a "slightly higher" margin.
                  Having got the Moderator's All Clear, try Handelsbanken. I have found them very professional and helpful.

                  Comment


                    #10
                    MickyV
                    You are correct , this bank is very commercial albeit very very risk averse but if the LtV is low they can indeed be a reliable source but I am always concerned that one should not have all your eggs in one basket . Provided the bank doesn't insist on holding a floating charge across all properties then worth a serious look.

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                      #11
                      Clueless - You should consider using high St banks for a larger portfolio as these are the main lenders in this market. Rates are significantly lower than what you are talking about for decent sized portfolios

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                        #12
                        After HSBC decided to change a fixed rate mortgage on us half way through the deal and we ended up nearly going to court high street banks can go swing, I'm also to impatient to deal with them as I work for a large multinational myself :-)

                        We're getting a commercial loan for our purchase which is fixed at 3.2 plus libor for 12 years (in saying that the vendor who was selling in Manchester just changed his mind!)

                        Thanks for the feedback hech. I hope the OP has some luck in getting a good deal.

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                          #13
                          Thanks so much for recommendations and help - will give Handelsbanken a look.

                          Frustrating that the banks will only go so high even at 35%! I imagine the market for LTD company loans against property is set to grow as more people incorporate to avoid osbourne's vice...

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                            #14
                            Clueless could you let me know who your commercial loan is with? also struggling lowest offer 5% +base over 15 years

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