Raising capital for commercial property can be a game-changer for investors looking to expand their portfolios.
Let’s go into the various methods and strategies to secure funding for your next commercial property venture.
Table of Contents
Raising Capital for Commercial Property: A Comprehensive Guide
Commercial property investment often requires substantial capital. Here’s how you can raise the funds you need:
Use Your Own Money
Before seeking external funding, assess how much of your own capital you can invest. This shows commitment to potential lenders or partners.
Bank Loans
Banks offer various loan options for commercial property:
- Commercial mortgages
- Buy-to-let mortgages
- Bridging loans
To secure a bank loan, you’ll need:
- A good credit score
- Stable income
- Detailed property information
- Collateral (often the property itself)
Private Investors
Private investors can be a valuable source of capital. These might include:
- Friends and family
- Angel investors
- High-net-worth individuals
When approaching private investors:
- Have a solid business plan
- Be clear about potential returns
- Explain how you’ll protect their investment
Crowdfunding
Real estate crowdfunding platforms allow you to raise smaller amounts from multiple investors. This can be a good option for those new to commercial property investing.
Joint Ventures
Partnering with other investors can help you pool resources and share risks. Make sure to:
- Choose partners with complementary skills
- Clearly define roles and responsibilities
- Have a written agreement in place
Equity Release
If you own other properties, you might be able to release equity to fund your new investment. This can be done through:
- Remortgaging
- Second charge mortgages
- Equity release schemes (for those over 55)
Government Schemes
The UK government offers various schemes to support business property purchases:
- Start Up Loans (up to £25,000)
- Regional growth funds
- Enterprise Investment Scheme (EIS)
Comparison of Funding Options
This table shows different pros and cons of each method:
| Funding Method | Pros | Cons |
|---|---|---|
| Bank Loans | Lower interest rates, longer terms | Strict criteria, lengthy approval process |
| Private Investors | Flexible terms, potential mentorship | May require giving up equity |
| Crowdfunding | Access to multiple investors, lower barriers | Platform fees, regulatory complexities |
| Joint Ventures | Shared risk, combined expertise | Potential conflicts, shared control |
| Equity Release | Quick access to funds | Reduces equity in existing properties |
Tips for Successful Capital Raising
- Do your homework: Research the market and have solid financial projections
- Network: Build relationships with potential investors before you need funding
- Be transparent: Provide clear, honest information about the investment opportunity
- Have a backup plan: Don’t rely on a single funding source
- Seek professional advice: Consult with financial advisors and legal experts
How to Increase Property Value
To maximise your investment, consider these strategies:
- Renovate and upgrade
- Improve energy efficiency
- Enhance curb appeal
- Add amenities
- Optimise space usage
How much deposit do I need for a commercial mortgage?
You’ll need a deposit of 25-40% of the property value. The exact amount depends on the lender and your financial situation.
Can I use my pension to invest in commercial property?
Yes, you can use a Self-Invested Personal Pension (SIPP) to invest in commercial property. This can offer tax advantages but comes with restrictions.
What’s the difference between commercial and residential mortgages?
Commercial mortgages often have higher interest rates and shorter terms than residential mortgages. They also typically require larger deposits and more detailed business plans.
How long does it take to secure funding for a commercial property?
The timeline varies depending on the funding method. Bank loans can take several months, while private investments might be quicker. Plan for at least 2-3 months to secure funding.
Selling your commercial property to Property Saviour can be a smart move if you’re looking for a quick, hassle-free sale. We buy any type of commercial property, regardless of its condition or location. Our process is straightforward, and we can often complete purchases within 10 days.
By selling to Property Saviour, you can avoid lengthy negotiations, estate agent fees, and the uncertainty of the open market. We offer fair prices and can even help with legal fees.
If you’re interested in selling your commercial property quickly and easily, get in touch with Property Saviour today. We’re here to help you move forward with your investment goals.
Sell & Leaseback Your Commercial Property
Are you a commercial property owner looking to raise capital for your next project or investment? Look no further than Property Saviour’s innovative sale and leaseback solution. This increasingly popular funding method allows you to sell your commercial property to us while continuing to lease it back for a set period, providing you with a cash injection to pursue your business goals while maintaining occupancy of your premises.
At Property Saviour, we specialise in helping commercial property owners across the UK unlock the value of their assets through tailored sale and leaseback agreements. Our experienced team of professionals is dedicated to providing fast, flexible, and transparent funding solutions that meet your specific needs and objectives.
When you partner with Property Saviour, you can enjoy a wide range of benefits, including:
- Fast access to capital: We offer quick and efficient funding, enabling you to seize opportunities and grow your business without delay.
- Flexible terms: Our bespoke agreements are tailored to your unique circumstances, ensuring a solution that aligns with your goals.
- No hidden fees: We pride ourselves on transparency, so you can trust that there are no surprises or hidden costs in our sale and leaseback transactions.
- Expert guidance: Our knowledgeable team will work closely with you throughout the process, providing valuable insights and support to help you make informed decisions.
- Peace of mind: By choosing Property Saviour, you can have confidence in partnering with a reputable and trustworthy company that prioritizes your best interests.
Don’t miss out on the opportunity to maximise the potential of your commercial property. Contact us today to discover how our sale and leaseback solutions can help you achieve your financial objectives while maintaining the space your business needs to thrive.
Sell with certainty & speed
Property Saviour Price Promise
- The price we’ll offer is the price that you will receive with no hidden deductions.
- Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
- These valuations or surveys result in delays and price reductions later on.
- We are cash buyers. There are no surveys.
- We always provide proof of funds with every formal offer issued.
We'll Pay £1,500 Towards Your Legal Fees
- No long exclusivity agreement to sign because we are the buyers.
- You are welcome to use your own solicitor.
- If you don’t have one, we can ask our solicitors for recommendations.
- We share our solicitor’s details and issue a Memorandum of Sale.
Sell With Certainty & Speed
- Our approach is transparent and ethical, which is why sellers trust us.
- 100% Discretion guaranteed.
- If you have another buyer, you can put us in a contracts race to see who completes first.
- Complete in 10 days or at a timescale that works for you. You are in control.
