The real estate market includes not only apartments and houses required by an individual, but also non-residential property, which is required by various organizations and manufacturing enterprises. Legal entities and entrepreneurs mortgage on commercial real estate is used to expand warehouse space, production lines, retail and administrative space.
Such a variant of registration of a new property is recognized by many organizations as particularly advantageous, and for some it is only possible to consolidate and increase the sphere of its influence, since there are far from the sufficient developing companies free financial resources. The most relevant topic is the purchase of real estate for entrepreneurs and managers of small and medium businesses. For individuals who purchase commercial real estate, this purchase is an opportunity to extract a stable income from the lease of the object.
Features of a commercial mortgage
Among the many other banking services, commercial mortgage deserves special attention, allowing it to become the owner of a non-residential fund with the involvement of bank funds on the same principles as the classic housing loan.
Mortgage programs for commercial real estate is a rather new phenomenon for Russia. The first targeted mortgage loan programs for legal entities and entrepreneurs emerged over the last decade. The relatively low popularity is due to the fact that these properties are in demand by a narrow category of borrowers, small business owners, whose share does not exceed 1/10 lately. For some organizations, the purchase of commercial property on an ongoing basis to anything – more preferable and less burdensome looks to rent non-residential real estate for the needs of the company.
Each case of commercial property mortgages is unique and requires individual consideration. Nevertheless, there are general options for how to take a mortgage on commercial real estate in Russian banks:
- The terms of processing and repayment presuppose a high degree of risk, which makes it necessary to present more stringent credit conditions. The company must demonstrate stability and profitability, and the loan is issued at higher interest rates with a short maturity (within 10 years). With a down payment of at least ¼ of the entire value of the object.
- Increased rates may differ by 2 percent or more from a standard home loan.
- A loan can only be issued by companies that can confirm a stable income.
- There are difficulties in the process of registration and approval, involving the initial registration of the transaction for the purchase and further transfer of funds to the seller after consultation with the lender. Finding an owner who is ready for such a situation is problematic due to the high risk of failure at any stage of the procedure.
- The process of registration and coordination of conditions with the bank takes a long time. More than with ordinary bank financing of individuals.
- Unlike the housing stock, it is difficult to evaluate commercial real estate due to the absence of any approved standards. Traditionally, the object of bail is considered promising from the point of view of a financial institution, if the area exceeds 150 square meters and is in good condition.
- The probability of failures is higher than in the retail sector lending to individuals, since the object of the pledge becomes less liquid real estate, which later will be difficult to sell at a profit. Banks are trying to refuse or react to legal entities and entrepreneurs if it is a question of a warehouse or area for expanding production.
Business leaders and individual entrepreneurs who intend in the long term to reduce the costs of carrying out activities are interested in the possibility of saving on rent. A completed mortgage loan, as a rule, is equivalent to rent. In addition, the payment to the bank – the value fixed by the contract, while the cost of rent over time can seriously increase.
The procedure for obtaining a mortgage on non-residential property involves several steps. A feature of this program is the invitation of a bank representative to assess the financial situation with the borrower, as well as a thorough preparation for the transaction. In addition to the documents of the client, you will need to collect paper on the collateral object.
Purchase of commercial real estate involves the collection of documentation in the preparation of the application to the bank, but a single listing that must be submitted for registration does not exist. Each bank has the exact status of the client. Thus, for registration of a commercial mortgage for individuals, entrepreneurs, officials of the organization, the lists will differ.
Documents for the borrower
Regardless of the status of the borrower, before applying for a loan, a standard list of papers is collected:
- The document on marriage, birth of children (if available).
- Military ID (if the borrower is required for military service).
- Taxpayer number assignment certificate.
- Bank account statements.
- The documents confirming the property status are certificates of ownership.
- A preliminary contract of sale on the acquired object.
- Expert opinion on the value of real estate.
- Insurance documents (personal insurance, property insurance).
- A document confirming the rights of the seller to the object of sale and the absence of encumbrances.
The above list is prepared in case of an individual, individual entrepreneur or organization without fail. The remaining papers are collected on the basis of the requirements of the financial institution.
Documentation for organizations
To purchase a business property in the interests of the organization, collect the list reflecting the financial situation and the degree of economic reliability of the future borrower. The representative of the organization prepares:
- Semi-annual report of commodity-money turnover.
- Accounting reports reflecting the expenses and income of a legal entity.
- Account statement of legal entities and movements on them.
- The balance sheet of the company.
In addition, the IP will need to submit to the bank
- Certificate of an individual entrepreneur.
- Income tax return.
- Certificate of no tax payment arrears.
- Extract from EGRIP.
- If the activity is subject to licensing – the appropriate permission.
Additionally, when applying for a loan, the following persons submit documents:
- A document confirming the work experience of a particular person in the position of the head of the enterprise (at least 6 months).
- Information about the labor income of the head.
Due to the high risk of cooperation with private companies, especially representatives of small and medium-sized businesses, the scope of lending for the purchase of commercial real estate is not widely developed. Restrictions for expanding activities in this direction are:
- The unwillingness of many lenders to risk their own finances in the event of default.
- Limited coverage of mortgage programs.
- A small number of existing proposals, under which a number of bank conditions are put forward with respect to acquired property.
Commercial premises for individuals and organizations must meet certain parameters that affect the liquidity of the collateral:
- area of 150 square meters;
- the object is part of the capital development;
- there is no encumbrance and claims for real estate by third parties;
- location – in the region of the loan.
Commercial mortgage for individuals and organizations allows you to purchase premises designed for:
- administrative needs;
- production organization;
- create new points in the service sector.
Careful study of proposals operating in a particular territory will allow you to choose the best design option.