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Commercial Mortgages for Day Nurseries

Do you need finance for:

  • Purchasing an existing day nursery
  • Refinancing your nursery loans
  • Expanding your existing day nursery
  • Refurbishing or extending your premises
  • Buying out a partner or shareholder

We have partnered with a company who specialise in arranging Commercial Mortgages and Funding for Day Nurseries.

Well established and well respected this Commercial Finance Brokerage has extensive experience in arranging loans, mortgages and bridging loans for Day Nurseries.

With access to a wide choice of lenders, funding of up to 70% of the Going Concern Valuation (Open Market Value) or purchase price, whichever is the lower can be obtained on Freehold businesses. The 70% figure also covers refinancing deals.  Typically the amount of funding would not exceed 100% of the value of the property alone.  A decision in principal can be obtained within 72 hours.

The 'Going Concern Valuation' will include the value of the property, the fixtures & fittings and goodwill.

Banks prefer to lend on existing Freehold Day Nursery businesses unless the lease is in excess of 75 years.  Obtaining funding for a new Day Nursery business, that is just starting up, is also difficult unless the applicant has an existing successful Nursery.  Banks will also be looking for applicants with some past experience in working in or managing a Day Nursery.  They will take applications from people who have run a business in the past, subject to an experienced and qualified Day Nursery Manager being in place at the time of purchase.

If you are buying a Leasehold day nursery, then Lenders will look at 50% of the purchase price or valuation whichever is the lower.  However Lenders will value short term leases at Nil and will therefore require additional security for the loan.

Competitive interest rates and flexible repayment terms of up to 25 years are available with some lenders allowing an interest only period of up to 12 months.
The best interest rate possible is found for you with rates typically ranging from 3.00 – 3.5% above Base Rate and unlike most brokers they will not charge you up front broker fees.
The broker will help you in completing the application forms and submit these to lenders along with their covering report.

Once the funding is agreed the lender will commission a valuation from a valuer on their approved panel. The valuation will take up to approximately 2 weeks to arrange and complete.

In order to keep the application driving forward they will liaise closely with yourself, the lender, the solicitors and, if necessary, your accountant to provide any additional information required.

What costs are involved?

  • Valuation fee of between £300 and £1,500 (plus vat).  The variation is due to the type of valuation, value of premises and location.
  • Bank arrangement fee will be between 1% and 2% of the loan.  Often this can be added to the loan on completion
  • Land registry fees and disbursements in the region of £400
  • Legal fees (these will vary from lender to lender)
  • Stamp duty (Up to £150k – 0%, Up to £250k – 1%, Up to £500k – 3%, Over £500k – 4%)
  • Broker Fees – There are no upfront fees but they will charge a completion fee of between 0.5 and 1% of the amount raised. This is not payable unless the deal goes through.

If you are interested in competitive finance for a new venture or wish to fund the expansion of your business, simply fill in the form below.