If you need to arrange finance, you must speak to a lender before requesting information about centers. Obtaining a loan for a business or commercial property is very much different to buying a house. Evidently, we don’t expect you to have pre-approval, but you should find out how much the bank is prepared to provide you the loan based on your personal circumstances.
Besides stating the loan requirements, you must know about the following things before taking loan for child care centers.
Some of the important aspects of taking Loan for Child Care Centers are:
Structure (Going Concern) Loan to Valuation Ratio
- Freehold (purpose built) up to 75%
- Freehold (converted residential) up to 80%
- Leasehold (greater than 10 years) up to 70%
- Leasehold (five to ten years) up to 65%
- Leasehold (less than five years remaining) up to 60%
- Mortgage over the freehold property (wherever applicable)
- Charge over the child care asset
- Guarantee from proprietors or directors
- Other GSI or ASI charges as applicable
- Lessor’s consent or right of entry
- Mortgage over leasehold is compulsory where the business is operated from leasehold premises
Tips for Buying
Some of the buying tips are:
Do you want to buy a leasehold child care center?
Even though, the child care centers incline to have high costs of operating and return low profit, there is a chance where to look and have the expertise and support of a commercial business broker.
Note: You can own a child care center as leasehold or either as a freehold going concern.
Leasehold means to simply own the business of a child care center, which means that you don’t own the land or premises that you are operating. With leasehold, the banks will lend you against the profitability of that business.
Valuations of leasehold commercial property are based upon the formula that takes into account the projected yearly profit and return on investment
Do you want to buy a Freehold Going Concern?
In the freehold arrangement, you may own both the business and land which means that banks might be willing to lend you more in comparison to the value of property or at high LVR. The reason is that the land itself is taken as security, together with the profitability of the business. Basically, with the freehold going concern there are two valuations; one for the leasehold and other for the security.
Apply for Loan for Child Care Centers
So, if you are want to take loan for child care centers, get in touch with Global Capital. They offer specialized property finance solutions and delivers fast approvals at competitive rates. Call us today for more details!