Mortgages and Security

Business premises are a substantial outgoing, whether you are buying or leasing, and if you need a commercial mortgage or have to put up security against a lease, the process is a good deal more involved than anything you would come across buying a residential property.

Commercial lenders tend to be demanding about paperwork, and getting the documentation through cleanly is a specialist job in its own right. Our secured lending solicitors advise on both the borrowing side and the security side of commercial property finance. We help you weigh up what you are being asked to agree to, and what it will mean for you and your business, before anything is signed. We aim to give you a plain English explanation of the paperwork at each stage, rather than leaving you to work through a lender’s documentation on your own.

Commercial lenders are generally more demanding than residential ones, and may ask for security beyond the property itself before they will lend. They will also ask for very detailed information with respect to the property and your personal circumstances, which can be daunting. Agreeing to terms or liabilities that turn out to be difficult to meet can cause problems well beyond the mortgage itself, so it is worth having the terms looked over properly before you commit to them. We advise on the lender’s requirements, talk through what is being asked of you in plain terms, and flag anything that looks like it could cause difficulty further down the line, so you go into the arrangement with your eyes open. Where anything in the paperwork looks unclear or unusual, we raise it with the lender directly rather than leaving you to query it yourself. If you are obtaining a bridging loan and need funds as quickly as possible, we move at pace to finalise the loan without unnecessary delay.

Lenders can ask for security in a number of forms, and what suits one deal will not necessarily suit another. That might mean a legal mortgage over the property itself, a Debenture over your company’s fixed and floating assets, or a personal guarantee from a director standing behind the business personally. As personal guarantee solicitors, we regularly advise directors on the implications of what they are taking on before they sign, since a personal guarantee can put more than the business at risk if things go wrong. Every organisation’s circumstances are different, so the right combination depends on your business, the lender and the deal in front of you, and we set out what each option would actually mean for you and the business so the choice in front of you is easier to weigh up.

Where a mortgage or security arrangement comes as part of a wider purchase, sale or lease, that wider transaction sits with our commercial property team, so the finance side and the rest of the deal are handled together rather than passed between two advisers.