FAQs – How Long Will It Take?
Over the last few weeks, we’ve been doing a series of blogs, around what we call FAQs – Frequently Asked Questions.
Over the years that we’ve been working with clients, we’ve discovered that the same questions come up on a regular basis, questions such as: What’s the maximum I can borrow? What’s the interest rate? And what are the set-up costs?
In our blog over the last few weeks, we’ve been answering these FAQs. In this, the final blog in the series, we deal with a very common question we get asked on a regular basis:
How long will it take?
In other words, “How long will it take to raise the finance that I’m looking for”?
The flippant answer is: How long is a piece of string?!
The problem is, it’s difficult to be precise on time scales for all sorts of reasons.
By way of example, two deals that we’ve completed recently, illustrate just how difficult it is to answer the timescale question.
One deal only took 21 working days to complete – 3 weeks from the initial meeting with the client to drawdown of funds.
On the other hand, another deal took nearly 9 months to complete. We had our first meeting with the client last year, in October 2020.
So, as you can imagine, it can be difficult to be precise about time scales and how long a funding application is likely to take to put together, get agreed upon by a lender, have a valuation carried out and then complete all the legal work.
Obviously, such as unsecured business loans, asset finance and invoice finance all tend to complete fairly quickly, usually within a matter of days or a few weeks at most.
However, where a freehold commercial property is involved, either as a purchase or refinance, the timescales usually take longer.
As a result, when a client is involved in a commercial property transaction and they ask us how long it will take for them to get funding, our response is to ask them how long it took when they bought their own house?
Their answer is usually 2-3 months, and I indicate that commercial property transactions are not a whole lot different and that 2-3 months is a realistic time scale.
That said, as is evident from the example mentioned above, where it took 9 months for the transaction to complete, the timescales can take much longer.
So, as you can imagine, it becomes difficult to be precise about how long it will take for a deal to complete.
However, ‘all things being equal’, on a commercial property transaction, if you allow 2-3 months from start to finish you won’t be too far wrong.
That allows for having all the information available, making the loan application, carrying out the valuation and doing all the legal work.
Sometimes it will be quicker and at other times it will take much longer than 3 months. Bear in mind, when you have a broker, lender, valuer and two sets of solicitors involved in a transaction, that’s quite a lot of ‘moving parts’ and potential for delay.
Therefore, my suggestion if you are working to a time scale, is to make sure you approach your lender or broker ‘earlier rather than later’ to give everyone involved in the transaction the time they need to get the deal done.
And if you’d like to talk to us about any requirements you have for a commercial mortgage or business loan, then why not get in touch?
Our contact details at Funding Track are 020 3857 3030 and firstname.lastname@example.org
Simply email us or give us a call on the above number and we’ll talk you through exactly how we can help.