Commercial property
Commercial property is any property that has its own form of title and could be held by a lender as security. This could be industrial buildings, offices, retail shops, etc.
Such a property is leased to a tenant/owner who pays a monthly lease and a percentage of building outgoings.
Lenders will have different lending margins but generally around 60% of value.
Business Finance
When looking to purchase a business the business will usually consist of plant, fixtures and fittings and goodwill.
Plant can be vehicles, machines etc, while fixtures and fitting may cover office/building fit out, equipment etc. These items do have a small value to lenders with a figure of around 25% of value available.
Goodwill is a figure payable based on the intangible value of the business. This value would relate to profit, reputation, clientele, contracts etc.
Most of the time there is no property available to be used as security. In such cases to obtain finance your house can be used as security to purchase a business.
Franchises
These are similar to purchasing any other business except they have a master franchisee holder who has created a business model to operate from. This model has generally been successful and the owner is looking to expand the areas of operating.
Lenders are likely to look more favourably on a franchise operation as it is a proven operation and many come with guarantee of turnover. Lending facilities available can be up to 50% of purchase price.
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