FAQ’s – How Long Will It Take?
I’ve been doing a series of blogs, which I started a couple of weeks ago around what I call FAQ’s – Frequently Asked Questions.
Over the years that I’ve been working with clients, I’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 the last few weeks, I’ve done a series of blogs where I’ve answered these FAQ’s. In this, the final blog in the series I deal with a very common question:
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 exact on time scales for all sorts of reasons.
To give you an idea, in the last few weeks, two deals that I’ve had drawdown, illustrate just how difficult it is to answer the timescale question.
So, for instance, one of the deals only took 7 working days to complete – 7 days from initial meeting with the client to drawdown of funds.
On the other hand, the other deal I’m talking about, took just over 12 months – the client instructed me in January 2018, and it completed this month – February 2019.
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 by a lender, have a valuation done and then carry out all the legal work.
Obviously, unsecured business loans, asset finance and invoice finance all 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 me how long it will take for them to get funding, my response is to ask them how long it took when they bought their 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 of my client who has just completed after 12 months, the timescales can take much longer. In that particular case, there was a ‘right of way’ issue that needed to be resolved and which took several months to sort out.
The problem was, nobody knew until we started the legal work that there was going to be an issue.
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 longer than 3 months. 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 is always, if you are working to a time scale and need funds available to complete, then make sure you approach your lender or broker earlier rather than later to give everyone the time they need to get the deal done.
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 8949 2122 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.