Commercial Mortgages Manchester

Mortgage to buy premises. Construction Industry Component Manufacturer Manchester.

Complicated somewhat by the pressurised timescale, and the fact that the company had actually exchanged on the purchase ahead of a mortgage offer, this was a fairly straight-forward deal.

The company applying for the mortgage, although based in Manchester, had originated in Blackburn and the latter part of the relocation programme involved the proposed purchase of premises. A large amount of heavy plant had been moved to the premises in Manchester and the occupation of the premises had commenced with a lease. The lease, which was granted by the London based company owning the premises, included an option to purchase within the first five years.

Perhaps mistakenly our Manchester client company had actually exchanged on an acceptance of the option to purchase ahead of our introduction to them. The need for an early resolution of the mortgage offer became obviously pressing.

Having already approached their own bank for a mortgage the Manchester client company was eventually introduced to Almondbury Finance. The reasons why the Manchester branch of their own bank had refused the mortgage application were firstly examined. It came to light that, during the transitional period, when the company was moving from Blackburn to Manchester there had been a hiatus where the turnover of the company had fallen. This had led to the company showing losses in the first year of trading from the Manchester premises.

Being well connected with the commercial mortgage marketplace we connected the Manchester client company with three lenders who were prepared to take a view on the trading problems. Indeed, by the time these applications were proceeding, the company was already trading through its problems. This led our lenders to issue firm offers for the mortgage to acquire the Manchester premises. The rate eventually presented to the Manchester client company was competitive in the circumstances and the deal was completed.

Looking back at this deal it certainly underlines the risk that the Manchester client company took when proceeding to exercise the option to purchase without a firm offer of finance. In all cases our advice has always been that a mortgage offer should, of course, be obtained before any commitment is made. Should the Manchester client company have failed altogether to secure the mortgage offer the consequences could have been very damaging and potentially litigious.

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