Commercial property

[Suffolk]

My husband and I have found a bar to purchase in France. We hope to have a reasonable amount from the sale of our property in the UK, in order to refurb and use for taxes in the first year and fees through the sales purchase, but this would mean that we have very little deposit for the actual mortgage.

Does anyone know if this would be allowed via the French mortgaging system or is it possible to get a commercial mortgage in order to complete the necessary works and therefore using our money for a dposit instead.

thanks
C

[CaroleBay]

Hello Suffolk

Commercial mortgages from French banks can be difficult to acquire for a number reasons.

Firstly, forget about the mortgage providers, the likes of UCB (they used to be known as Abbey National France), GE Money Bank, BPI, etc - they are not allowed to involve themselves with anything of a business or commercial nature.

The banks, those that you will find on the high street of any town or city and who offer full banking facilities and services, can lend on business/commercial ventures.
BUT ... they do not operate under a centralised system. A bank will only lend on businesses or property within its own local area.

Probably the bank who would be most likely to offer mortgage finance, would be the bank that has the business bank accounts. If the business is good, then they will obviously be aware of it.

You will need to provide a deposit for the mortgage, and the percentage may vary from bank to bank, but assume at least 30% of the purchase price, although you may be fortunate to find a bank that will accept 20% downpayment.

The bank will also want to be assured that you know how to run the bar and have experience of doing so. It is their money they are lending, and with limited experience they will more than likely require a higher deposit from you.

You'll need to present the bank with your business plan, which should include the last 2 years trading accounts of the business (some banks will require 3 years accounts). Cashflow forecasts are important, and you'll need to include the figures for income tax and social charges to show these can be afforded (social charges are high).

With a domestic/residential mortgage, an existing income is essential, and the banks will want to see financial back up.

For these reasons and a few more, we only arrange domestic/residential mortgages with French banks, but maybe there is someone out there who specialises in commercial mortgages and can offer their advice .....

Kind Regards
Carole Bayliss
mortgagefrance.com