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| Income/Serviceability |
The borrowers income should be sufficient to cover the projected capital & interest payments.
Sufficient income should remain after the loan payments to cover other financial commitments. |
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Minimum Debt Service Ratio (DSR) in accordance with the individual product requirements.
An interest cover ratio (ICR) test is also applied. |
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Income is calculated based on forecast or actual net profit plus acceptable add-backs (interest on refinanced debt, rent
payments, owners'/directors' salaries, some depreciation or non-recurring costs). |
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Investment cases are tested against net rental income. |
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Additional support from employed income, other business profit or investment income may be considered. |
| Financial Evidence |
Subject to individual product requirements; one to two years' accounts/financial statements, one year's management
accounts/financial forecasts or an income declaration supported by accountant's letter of affordability will be
required to confirm serviceability. |
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For investment cases; copy leases and confirmation of rental payments by rent or bank statements. |
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If the business is a new venture we will require financial forecasts and an income/expenditure statement
together with a summary of the background and experience of borrower.
Forecasts should be verified by an accountant or business advisor. |
| Credit Profile and Mortgage & Bank Conduct |
Bank conduct to be confirmed in all cases by 3 months most recent and consecutive bank statements. Business and personal statements will usually be required.
Mortgage conduct to be confirmed by 12 months mortgage history (refinance, self declaration or where there is adverse credit). |
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Subject to individual product requirements;
Past mortgage arrears are permissible up to a maximum 2 months.
A full explanation will be required. |
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CCJ's - subject to a satisfactory explanation.
CCJ's registered by the Inland Revenue & Customs must be satisfied on or before completion. |
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Where the applicant is subject to a debt management plan confirmation of satisfactory conduct will be required. |
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Where an applicant has been subject to a formal insolvency procedure, a full explanation will be required together with appropriate references. |
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| LTV |
Loan to Value is based on open market valuation. LTV thresholds may be reduced for certain property types
where condition, marketability or resale is limited. |
| Acceptable Property Types |
| Retail |
80% |
| Offices & Industrial |
80% |
| Licensed & Hospitality |
75% |
| Rural & Agricultural |
75% |
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| Unacceptable Property |
Healthcare except Day Nurseries.
Domestic residential property although buy to let and residential investments are acceptable. |
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Limited Development Proposals are acceptable. Property must be in acceptable condition for intended trade and
purpose on completion. Minor upgrade, fit-out and refurbishments are acceptable. |
| Property Tenure |
Freehold or Long leasehold property acceptable where a period of 55 years lease is remaining at the end of the
proposed loan term. |
| Property Value |
Minimum property value £150,000. |
| Other LTV features |
Tenant purchases / family transfers at discount considered using 100% of open market valuation. |
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| Application Procedure |
Complete a DiP and fax it to 0845 465 6501 or
email newbusiness@business-lending.co.uk |
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Property details from agent particulars or prior valuations will help us quote best terms. |
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The New Business team will aim to provide indicative terms within 4 hours. |
| Valuation |
Our New Business team will advise you of our valuation panel. You can agree fees, payment terms and book
the appointment direct with the surveyor. Our processing team will follow up with the instruction letter once you
have confirmed payment. |
| Application |
Credit searches are completed by Business Lending. To comply with Data Protection requirements we must
have a signed application form and information declaration before we obtain the searches. |
| Offer & Acceptance |
On receipt of an acceptable valuation and application form with proof of identification
and residency. |
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The offer will be sent to you to arrange acceptance. |
| Legal Process |
On acceptance of the offer and payment of the commitment fee we will instruct our solicitors to complete the
legal review and security documentation, the costs of which will be payable by the borrower. |
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A fee scale applies for standard cases:
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Minimum fee |
£500 |
| ii |
Loans up to £350,000 |
0.5% |
| iii |
Loans of £350,000 to £750,000 |
£1,750 flat fee |
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All the above are subject to VAT and disbursements.
In cases where there are additional/multiple leases or titles there may be additional fees payable. |
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The borrower will need to be represented by their own solicitor and they will be responsible for the legal fees in
this respect. |