Commercial Business

Small companies are likely to have a tough time ahead because of the credit fiasco affecting world banks.

The Federation of Small Businesses said that small businesses could be put out of business because banks, needing to recover their recent losses, will higher the interest rates on business loans similar to those of the l980’s.

The organisation stated it had heard of banks already charging 10.5% a year as the interbank rate rose to 6.9%. This is after having said that they were not going to raise interest rates.

Small businesses in many areas are still feeling the aftermath of flooding and really do not need added complications that will possibly put some small businesses in jeopardy.

It was also warned that some large businesses would feel the pinch which in turn would have knock on effect to the smaller business.

The fact that money for loans would not be so forthcoming from the banks together with the high interest rates would have an effect on both large and small businesses plus those who are planning to start a new business.

Business The Internet and The Call Centre are making this type of business more mainstream. It is now possible to get funds released within days of your enquiry by placing the business in the hands of highly skilled commercial mortgage brokers.

Whilst rates are no longer 3% over bank base or 2.7% over LIBOR they are still well above those rates associated with residential buy to let mortgages. It is now possible to ‘close a deal’ where the interest rate is 1% over bank base; 85% Loan To Value, interest only for a considerable amount of the mortgage term and a term that is well over 20 year’s in length.

Commercial and residential buy-to-let in Dubai "strengthening"

The market for both commercial and residential buy-to-let investment in Dubai presents exciting possibilities for Britons, an expert has claimed.

Rhiannon Williams, director of online property investment publication Amberlamb, said that commercial property in particular is experiencing a "strong and strengthening demand", which presents "a fantastic diversification" for the savvy investor.

"What's more, yields can often be more attractive when you factor in things such as tenant credibility and accountability, as well as the long-term and sustainable returns you can often achieve with commercial space," she remarked.

Her comments come as new laws were implemented this week in the Dubai International Financial Centre (DIFC).

The Real Property Law, which is based on English common law, allows buyers to own freehold land. Meanwhile, the Strata Title Law delivers an administrative basis for building management.

Ms Williams said that these changes mean that "in the future there will be plenty of residential property in DIFC to choose from".

Buy-to-let investors currently have the chance to get in on the ground floor of one of the "newest and [most] advanced international financial centres in the world", she added.

Dubai was formed with the creation of the United Arab Emirates in 1971.

Businesses 'should look to high street for commercial mortgages'

Small businesses which are seeking commercial mortgages to purchase a property would be best off going to a high street lender, a business consultant said today.

Stuart Woodward of business advisers White Rose Finance recommended that companies steer clear of sub-prime lenders because their rates are too high.

"My advice, if you're starting up, is to be rather selective … put in quite a high deposit - 25 to 30 per cent will secure you a high street lender," he said, explaining that will protect people from getting "stung on interest rates".

Firms looking for commercial mortgages may want to keep in mind that lenders will probably want to see three years trading history, he remarked. New businesses would need to be "secure and concrete," he added.

Mr Woodward commented that businesses can benefit from owning their own property and accruing additional equity.

"I suppose at the beginning, with a brand new set up, it might be better if you go in as a tenant until you've got your business established," he said.

However, he explained that renters are not able to raise money against the property unless they own it.

© See Terms and Conditions