Whether for personal or business reasons there are many people that are needing to improve their credit rating. Whether your score only needs a small boost or a complete overhaul, these tips can help you get your credit score where you want it to be.

Remember that business creditors also report the conduct of your account to the credit reference agencies, so if your agreement says 30 days you may find that anything beyond that is reported as a late payment.

Start by getting a copy of your credit report. There are many agencies where you can get this information.  Look out for the “monitoring” products.  All you need is your statutory report which costs £2.  You can now get the report by post or email.  The only way that you can fix any credit report issues is to get the report, and work out each item.

If you are the director of a limited company, or a sole trader you will need a business credit report too.  It is vital to understand that if you are trying to raise commercial finance you will still be checked as an individual.  Forget trying to hide behind a limited company name.

If you are having difficulty be sure to get in touch with your creditors to determine which bills you can postpone and which you can pay a little at a time. You can save yourself a lot of money if you learn what you need to do to avoid paying interest penalties. As you learn what leeway certain creditors will give you, then you will be able to focus the bills that need taking care of immediately.

Be sure to study your credit report carefully, as it could contain mistakes. Read through every mark against your credit score, and insure each is accurate. In the event that you do discover something suspect, immediately bring it into question with whomever reported it. When you do this, you may be able to have fraudulent or incorrect items removed. That will give you a better credit rating.

Be aware that you have rights when communicating with collection agencies. For example, you will not be imprisoned because of an inability to pay a debt, and a collection agency cannot legally make threats toward you.  The more you know about your rights, the more you’ll be able to stand up for yourself.

You should never use more than one third of your credit limit on any card. Keeping your balance in this range also keeps your payments reasonable. Anything over this is not good for your personal financial situation.

You can try to see if you can set up a payment plan for the bills that are already in collections.  Not taking the call of a debt collector can exacerbate the problem. Often, collection agencies will actually work with you to come up with a payment plan that is realistic.

If you are behind with your bills try to be more honest you are about your situation.  Don’t start applying for loans before you have set up payment plans, you will just be wasting your time and damaging your credit report.

These techniques can help you get back on the road to good credit. If you start today, you will be well on the way to getting your credit back in good shape.  It is possible to bet bad credit commercial mortgages, but you need to be ready to answer all the difficult questions!

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This is an introduction to commercial mortgages to help you understand what you need to do to successfully get a commercial mortgage for your business.

The principles are the same whether you are a sole trader or limited company.  However it is worth bearing in mind that most limited companies have multiple directors, so as you will see, this can make a difference to the banks.

The present economic uncertainties combined with restricted availability of capital for commercial mortgages means that it is likely that potential borrowers will have to carry out quite a lot of research in to business financing.

Commercial mortgages can be used to buy new business premises or to buy an existing business in its entirety. Lenders generally require a deposit of around 25%-40% of the total value. Mortgage terms can run from 1 year, up to around 30 years.

Despite the UK government’s u-turn on residential buy to let properties being held in SIPPs some people are optimistic that the market will grow further as commercial mortgages become more mainstream.  Any improvement to the wider economy will greatly help investors looking to expand their portfolio into the commercial property sector.

Using A Commercial Mortgage Broker

Using a mortgage broker who is expert in arranging commercial mortgages can make a significant difference.  In addition to commercial mortgages most commercial finance brokers will deal in bridging loans, development finance and secured loans.

You can use a commercial mortgage broker at the same time as approaching your bank directly, but watch out for how many credit checks are being carried out.  Commercial mortgages and the activities of brokers are almost completely unregulated so looking out for membership of a trade association is a good precaution.  The National Association of Commercial Finance Brokers attempts to regulate the activities of its members, so is a good place to start.

Frequently, the mortgage is supplemented by a personal guarantee from the owner(s), which makes the debt payable in full even if the business folds or the property is repossessed.  The lender can also call on the collateral if they think the security will not satisfy the outstanding balance.  A limited company with 3 or 4 directors all providing guarantees is going to be a much more attractive proposition to a lender than a one-man-band.

Rates and Loan-to-Values for Commercial Mortgages

The exact loan-to-value you receive for your commercial loan will depend on the lender and the strength of your proposition. Many commercial lenders consider the type of business they are providing the loan for as well as the condition of the property.  The rates charged by different lenders can vary tremendously.

A good solid business with a proven track record, buying a property in good condition should be able to negotiate very favorable terms from a choice of lenders.  However, if any of these factors are lacking then the rates can start climbing steeply.  Another good reason why using a commercial mortgage broker is a good idea.

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Read more about this subject here: Introduction to Commercial Mortgages

The Five Pillars Of Every Commercial Mortgage

By: Timothy Frodsham

Any entrepreneur looking to buy their own premises or investors looking to add commercial property to their portfolio, will need a commercial mortgage. Business loans and commercial mortgages are created to assist businesses and individuals raise the capital needed to buy warehouses, offices, shops and factories or other commercial premises.

There are some similarities between the two types of mortgages – lenders will tend to offer a sum of money based on the the property you buy, it will act as security in case of default. However there are some fundamental differences. This easy to follow guide highlights the top five facts everyone should know about commercial mortgages.

1. Deposits for commercial mortgages are higher than for normal home loans: When you decide to purchase a residential property, you will normally have to put down a deposit of at least 10-15 per cent of the asking price. Depending on how risk averse the lender is, will determine whether or not they will require higher deposits, particularly to secure the very best interest rates. Lenders may take into account all manner of personal circumstances before they calculate the size of deposit they will require.

When buying a commercial property, however, you will have to commit a much higher proportion of your own cash. It is not unusual for a commercial mortgage lender to require you to put down a deposit of between 30 and 40 per cent.

2. You may need to provide a personal guarantee: Many buyers look to purchase the commercial property in a company name. However, what happens if the company cannot make the repayments? To avoid this situation, many commercial mortgage lenders will insist that the directors of the company provide a ‘personal guarantee’ – a commitment that they will personally keep up the mortgage repayments should the company fail to pay.

3. Duty Free: If you decide to take out a commercial mortgage, HM Revenue and Customs (HMRC) will treat the interest payments on the capital of the loan as an allowable expense for taxation purposes. Therefore, your company can reclaim the expense of interest payments on a commercial mortgage as a tax deduction when they are preparing the end of year company accounts or the Self Assessment tax return.

4. Commercial Mortgages Can Be Cheaper Than Commercial Lending: It’s a common misconception that a commercial mortgage is the most expensive financing option, people see the word mortgage and deem it expensive and too burdensome a commitment. But if you compare it to standard commercial loan or covering expenses with credit cards and company overdrafts, the interest rates are much more favourable with a commercial mortgage than any of the above as the lender has the property as security against the mortgage.

So, many companies use commercial mortgages not only to buy premises, but also to take the sting of exorbitant interest rates out of their business. Think how much money you might be able to save this way?

5. Commercial mortgages may be structured differently to residential mortgages: Many residential lenders will allow you to take out your mortgage on an interest only basis. However, a commercial mortgage will generally have to be repaid on a capital and interest (repayment) basis. A lender may allow you to make interest only payments for a year or two but the loan will generally have to be converted to a repayment basis after this time.

One final potential option for commercial mortgage payments would interest payments on the mortgage could be set up to be paid quarterly instead of monthly. This option can be particularly helpful for claiming tax deductions from HMRC as it would make the paperwork easier to handle in this regard. As you can see commercial mortgages have many advantages to consider and don’t have to be the drain on finances that their reputation gives them.

Author Resource:-> Timothy Frodsham writes for Just Commercial Mortgages the UK’s No.1 site for the latest commercial mortgage rates and commercial property finance news.

Article From Articles Depositery

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Read more about this subject here: Commercial mortgages -5 pillars never to be forgotten

In a week that it was announced that the UK economy has crawled out of recession it is worth taking a moment to think about what opportunities exist for commercial mortgage brokers at the moment.

Commercial mortgage brokers have had something of a difficult time over the last couple of years.  Obviously the availability of cash rich lenders has somewhat changed, but at the same time the number of optimistic entrepreneurs has shrunk.

One interesting snippet of news is that Birmingham based lender/broker “Crystal Mortgages” have launched a 100 per cent commercial mortgage product aimed at the medical sector.

These specialist commercial mortgages are available for terms between 7 and 30 years with a minimum loan of £30,000.  Rates are apparently variable and start from 2.51% over BBR (or Libor)

Considering market that these mortgages are aimed at you can take it as read that management accounts showing comfortable levels of affordability will be expected, along with a near perfect credit history.  Seems that some goodwill can be included in the overall loan.

An Opportunity for Commercial Mortgage Brokers?

On a completely separate note, there is one interesting theory doing the rounds at the moment.  It relates to an often overlooked clause in most mortgages agreements (particularly commercial mortgages) that requires the borrower to ensure that the loan does not exceed a specified Loan-To-Value (LTV).

One of the mainstream residential lenders tried reminding their customers about this type of clause and then retracted in the face of some fierce media reaction.  Such reaction is probably unlikely in the case of commercial mortgages.

Essentially the clause permits for the lender to demand cash to reduce the loan to an acceptable level if the value of the asset shrinks, or introduce additional security to reduce the loan ratio.  Here’s where the business opportunity for commercial mortgage brokers could present itself:

Assume that a business took out a 65% LTV commercial mortgage with a mainstream lender on a property valued at £200,000 in 2007.  Three years later the value of the property has shrunk to £155,000 – the loan now stands at around 85% so the bank demands that the business introduces some capital to reduce the loan.  Businessman is stuck.

Up steps the switched on commercial mortgage broker and takes a customer from a mainstream bank to a suitable alternative lender who offers a higher loan to value.

Well OK 85% on a self cert commercial mortgage might be a bit of a stretch, but the principle is sound, what do you think?

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Are you  planning to take on more new staff in the early part of 2010?  According to smallbusiness.co.uk there are quite a few of you out there who are planning to increase your workforce.

Small businesses say they intend to take on more staff in the New Year.

One-quarter of SMEs are planning to hire in the next three months, of 2,000 small businesses surveyed by software company Sage.

Brendan Flattery, managing director of Sage’s small business division, says: ‘The fact that small businesses are starting to think about recruitment in such significant numbers is a very encouraging sign. But there is still a long way to go and good financial planning will be key to their recovery.’

However, the findings in the poll are in contrast to claims made by accountancy firm BDO that many companies will not be hiring more staff when the recovery comes.

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Might seem hard to believe but despite all the recent bad news a significant proportion of people in the UK still say they want to start their own business.

Of 2,121 adults surveyed, some 17 per cent want to launch a start-up, according to social enterprise organisation Enterprise UK. The body predicts that if one in ten of the respondents realised their ambition, it could create 1.1 million extra jobs.

Carl Schramm, president of entrepreneurial charity the Kauffman Foundation, says: ‘Job creation is the number one issue facing families and policymakers during this economic recession, and this study shows that new businesses and entrepreneurs are the key factor in adding new jobs.’

For those wanting to start a business, 49 per cent said the recession has had no impact on their decision to start-up. The number of people expressing a desire to launch an enterprise was only 12 per cent last year.

In a recent speech, the former head of the Confederation of British Industry, Lord Digby Jones, claimed that small businesses alone would rescue the struggling UK economy.

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Now this might not come as a surprise to most small business owners, because to them this is a way of life.  However lets hope that local and central government are quick to support these brave souls!

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The Small Business Finance website has reported that inflation has started to creep upwards.

Consumer Price Inflation (CPI) annual inflation, the government’s target measure, was 1.5 per cent in October, up from 1.1 per cent in September.

Meanwhile, the retail inflation (RPI), which includes mortgage interest payments and housing costs, rose to -0.8 per cent from -1.4 per cent, according to figures from the Office for National Statistics.

Inflation accelerated during the month mainly because of upward pressure from fuel prices.

David Kern, chief economist at the British Chambers of Commerce, says: ‘These figures are closely in line with the Bank of England’s recent forecast that inflation will accelerate sharply in the next few months, possibly reaching 3 per cent, before falling again later next year.’

He adds: ‘Given the serious risks facing the UK economy and the dangers of a double-dip recession in 2010, it is important for the MPC to persevere with an aggressive quantitative easing programme, and to consider special measures aimed at boosting bank lending to businesses.’

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Rising inflation -v- interest rates -v- property prices; hard to imagine a time when these three important economic factors have had all such bearing on the state of the economy at the same time.

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The Independent has reported that the commercial property market is showing signs of life. Granted that coming from a very low base line any improvement is going to look significant. However good news is good news.

Here’s a snippet of the article, you can read the full piece here.

About a year ago, observers of the UK commercial property market would not have been shocked to see the Four Horsemen of the Apocalypse riding around the corner.

The banks would not (and, indeed, could not) lend, companies were not looking for office space, particularly in London, and firms that would consider signing new leases were only looking for short-term agreements, on smaller offices. Those that can recall the demise of Woolworths can guess what retailers thought of taking on more space.

The property market slump had long been signalled. Two years ago, the Royal Institute of Chartered Surveyors (Rics) fired a shot across the bows of the industry, warning that demand for buying and letting commercial property had fallen to a four-year low, stoking fears that the sector was heading for a depression not seen since the early 1990s.

The article goes on to discuss the availability of commercial property and equally importantly the availability of commercial mortgages.

“Recent price rises have largely been driven by the shortage of supply. While there are many potential buyers of commercial real-estate, at the moment not many people want to sell. In addition, real drivers of value are still weak,” says Jonathan Thompson, head of real estate and building at KPMG. “Reduced spending by consumers, along with business failures, is driving down occupancy and rental rates; would-be renters and purchasers of commercial property are still in short supply.

Has to be stressed that we are coming up from a very low baseline with hardly any activity on the commercial property market, however interest rates are still low, and with the economy looking better this may be the time to start looking at commercial mortgage options again.

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Read more about this subject here: Commercial Property shows signs of life

Anyone who has a Commercial Mortgage will (or should) be familiar with LIBOR.  So they should also be quite pleased that LIBOR has reached a record low.

LIBOR is the rate which determines the cost of most commercial mortgages and many other forms of borrowing.  The rate coming down may bring good news in that interest rates on mortgages and other loans may follow suit.

Having said that, a recent Moneyfacts article reported that:

On an unsecured loan the rate is set at outset and repayments are fixed. Most secured loan repayments move with base rate or LIBOR, but despite being in a low interest rate environment the average rate has increased from 9.9% to 12.4% in the last two years

Just before things started to go badly wrong some of the independent Commercial Mortgage lenders were starting to offer variable rate mortgages.  Good example would be Commercial First – although they have shut-up shop for new business they had a significant market share of small commercial loans.  Many of the later loans were sold on variable rates.

Anything that reduces outgoings for businesses right now is going to be good news, but anything that gives banks good reason to start selling commercial mortgages again is going to be even better news.

Sadly, the majority of Second Charge loans (homeowner loans) were sold on fixed rates – at the peak of the property boom Second Charge loans were being sold at an incredible rate, and by a market that faced no significant regulation.

Second Charge loans on homes are very often linked to LIBOR ( which often comes as a shock to homeowners) and are notoriously slow to change with the main rate – if at all.

Are you on a LIBOR loan? – have you seen a change in rates?

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Whilst helping a friend work out the costs involved in raising a commercial mortgage recently I suggested that they use a commercial mortgage calculator.  It turns out that this simple piece of advice actually involves a lot more work.

With home loans it is quite easy to find a calculator which will quickly display the total costs involved in setting up home loan.  Despite the fact that the principle behind both mortgages is the same, it is quite hard work finding a good quality commercial mortgage calculator. But, lets take a step back and consider what exactly is the point of finding a calculator:

To establish the basic costs of borrowing a fixed amount of money.

If a business takes out a loan over the full term of a mortgage then the interest rate is the single biggest factor, however what most commercial mortgage calculators do not take into account is the costs associated with arranging the finance.  Given that the vast majority of commercial mortgages are refinanced inside 10 years you must factor in the set up costs, administration fees, and any early repayment charges.

To compare 2 or more commercial mortgages side-by-side.

Shopping round is is vital, so it’s perfectly reasonable that you might end up with two or more quotes from different lenders.  Using a simple mortgage calculator you can quickly assess the impact of small interest rate variations on your day-to-day cash flow.  This is particularly useful when comparing a fixed rate to a variable mortgage rate.

To double check whether an existing quote is accurate.

Thankfully commercial mortgage brokers are coming under increasing pressure to disclose fees, however there are still some who will try to hide the true figure.  One way of doing this is to provide a business client with mortgage illustration showing the repayments based on the loan amount, but actually putting the broker fee onto the loan amount without adjusting the repayments.  Using a simple mortgage calculator will immediately spot if there is a discrepancy in the loan amount.

Using a commercial mortgage calculator can really help a business workout the true cost of finance and compare mortgages.

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Read more about this subject here: Using A Commercial Mortgage Calculator