Provider Guide
Bank of Scotland
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Bank of Scotland - Commercial mortgages
Bank of Scotland is part of the HBoS plc group which was formed when Bank of Scotland bought out Halifax, one of the UK's largest residential lenders. This purchase occurred just before Royal Bank of Scotland bought NatWest and heralded the arrival of the "Scottish banks".
Bank of Scotland offers a range of financial services and is trying to compete with the big four banks of NatWest, Barclays, LloydsTSB and HSBC. As a result it offers the same sort of financial products that all of these do. Significantly its entrance into the market has seen a sharper hunger for these products.
One of these products is in the sphere of commercial mortgages and the "smartfinance" commercial mortgage they offer.
Smartfinance
In essence this is a commercial mortgage that takes into account what you have in your business account. Just like a residential offset mortgage. The rate that you end up paying can be significantly lower than commercial mortgage rates if you have a significant deposit in your business account.
Business Banking
As part of the same package Bank of Scotland have been very keen to offer a competitive business bank account and offer a number of free services, depending on the type and nature of your business.
Service
Bank of Scotland has been recognised as providing a strong offering in this field as it has been voted best commercial mortgage provider in both 2003 and 2004. This was a vote by members of the national association of commercial finance brokers. A body that consistently deals with business finance and whose members find finance for their customers. This is the primary body whose members deal with commercial mortgage and other business finance services
Commercial Mortgages
This is a commercial mortgage over business property and is usually required if you need to purchase a property for business purposes and can't afford to buy it outright. Typically most lenders will give you a 75% mortgage. This means you have to find 25% as a deposit. This can be in cash or in some cases, in other property that you own.
If you are a professional however, such as a Doctor, Dentist or Vet, Bank of Scotland can offer a 100% loan, but this is dependent on your circumstances. Obviously such a scheme is very attractive to professionals.
If however you are purchasing other property, then a normal, or possibly smartfinance type mortgage may apply. This is calculated by either reviewing the accounts of the business that you are purchasing or by the tenancy agreements. In each case a lender is looking to calculate that you can afford to pay back what you are looking to borrow. This "serviceability" is just like a residential mortgage.
As well as a survey of the property a lender is then able to make you an offer. In the case of Bank of Scotland, it may be more suitable for you to acquire a 'normal' mortgage rather than the smartfinance options. The amount you retain in your current account and the relative in-flow and out-flow will determine which is best for you.
Commercial mortgage steps:
- View commercial property
- Make offer
- Arrange Finance
- Submit accounts/tenancy agreement
- Arrange Valuation
- Submit remaining financial requirements
- Lender offers a deal
- Accept offer
- Instruct solicitors
- Pay Stamp Duty (doesn't apply in a remortgage)
- Acquire property
Learn about:
Commercial Mortgages
Buy to Let Mortgages
Factoring
