In the last couple of months we have been instructed to sell a number of freehold businesses in Essex. These include 3 different pub/restaurants, 1 Learning Disability Home, 1 B&B & slightly more unusually a business park.
These will range in price from £675k up to £1.2m. Freehold business have a value purely as bricks and mortar as well as the business value, fixtures, fittings and goodwill of the trading business. We have a number of buyers who will only consider freehold businesses as they see a large share of the value of what they are buying is held in the property itself. The property may also have alternative uses which in itself is a value as well.
Naturally these businesses are more expensive than leasehold opportunities however not everyone has the capital available to them to buy a building as well as a business.
It is far easier to secure borrowing against a freehold business than a leasehold business and even saying that, there will be certain sectors that banks will prefer to end to and certain sectors that banks will want to stay away from. Financing a freehold business purchase is rarely straightforward if you are looking to borrow money against the business you are buying. If you are able to secure borrowing against existing agents you own to release the cash to buy a freehold business that could prove to be the simpler way to raise funds in a lot of instances.
You will be required to put down at least 25% of the value of the property you are buying and in a lot of cases your choice of lenders increases if you can put down 35%.
It is important to remember that freehold business sales will be valued as commercial properties. They can not be directly compared to nearby residential properties even if they have semi-residential use such as a Guest House or Hotel.
In a lot of cases freehold sales will also be marketed on a Confidential Sale basis. This limits the amount of information that we will put out there initially so that it controls where the information is seen and more importantly who it is seen by. If you are interested in buying or selling your freehold business in Essex please get in touch with our office.