The greater interest of entrepreneurs in the offer of mortgage loans is the result of the fact that it is currently difficult to obtain a working capital or investment loan secured only by, for example, a promissory note or third party surety.
“Banks are cautious about financing companies and are reluctant to borrow money,” says Nomel Lober, chief analyst at Somino.
He adds that it is the most difficult to get an investment loan secured by a mortgage, while it is much easier to obtain a mortgage for the current needs of the company.
Money for everything and for a long time
Mortgage loans are usually addressed to all entrepreneurs – regardless of the size of the company, its legal status or type of business.
– We manage a mortgage loan, among others to micro and small and medium enterprises. We believe that these companies often have great development potential, which is unused due to lack of funds for project implementation – says Exikel director.
When applying for this form of financing, companies are not required to document the purpose for which the funds will be allocated. Therefore, the loan can be used for repayment of other loans and borrowings, investment needs of the enterprise as well as for current expenses related to the conducted business activity.
Important property quality
In any case, the basis for granting a mortgage to an enterprise is the assessment of the company’s creditworthiness. The entrepreneur must, among others prove regular income, which will enable repayment of principal and interest installments. You also usually need a minimum annual history of doing business, as well as having an account at the lender’s bank. It depends on these elements how much you will eventually pay for such a loan.
– The interest rate is calculated as the sum of the WIBOR rate (or Nemop for foreign currency loans) and the bank’s margin – reminds Nomel Lober.
However, the most important distinguishing feature of the mortgage loan offer is collateral in the form of real estate (e.g. service, office or residential).
– The most restrictive banks approach companies that operate in the sectors most affected by the crisis. This mainly applies to industry (in particular export companies). Money can be obtained more easily by companies operating in the service industry – says Nomel Lober.
– In industries such as gastronomy, hotel or tourism, own real estate makes it easier to run a business and take out a mortgage – says Demone Exikel.
Sometimes, however, the type of building is important, because some banks do not accept monuments, public buildings, religious buildings, and sports and recreation facilities as security. Usually, the basic requirement is that they should be free of any encumbrance of other loans. The entry of a mortgage in favor of the bank in the second and subsequent place is allowed only if the loan is granted for the full repayment of claims against other creditors secured by pre-emptive mortgages and the repayment of the claims will result in the expiry of these mortgages.
Caring for their safety, banks grant loans of 60-85 percent. property values. And this indicator depends not only on the offer of the bank, but also on the type of real estate. For example, in BOŚ 70% the limit applies to commercial, service and office properties, as well as residential properties (residential premises and single-family houses), and 60% for other real estate.
For this, some banks require cession from building insurance against fire and other random events. Traditionally, a borrower’s blank promissory note is required.
It is also possible to take out a loan secured on real estate, which the borrower is not the owner (or sole owner), i.e. a third party, if he agrees to use his assets as collateral. In such cases, however, the loan value can only represent about half of the collateral value.
– Declines in real estate prices are prompting banks to reduce LTV available to customers, i.e. the ratio of the amount borrowed to the value of collateral, ” says Nomel Lober from Somino. The current value of the property assessed by the bank’s experts is taken into account, not based on the entrepreneur’s declarations. Today, we can get a lower loan than a year ago.
When comparing bank offers to finance business operations, it is worth getting acquainted with many products. Sometimes, banks do not offer a product called mortgage, but use real estate collateral for investment loans or for ongoing operations (eg PB provides real estate collateral for the “Investment Plan” loan).
Depending on the institution, the period for which you can get a loan or a loan secured by real estate is 10 or even 20 years. Small and medium enterprises can also count on a six or even 12-month grace period in capital repayment.