ive seen a salon nr me for sale freehold with a flat above - we couldnt get a morgage for a house but ive been told business morgages work differantly -is this true? would i have to show the morgage people my business plan?
Buying freehold salon
- Thread starter liana kay
- Start date
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number1kitty
Well-Known Member
Yes you have to prove the business is viable and we repay your loan.
kate
kate
Layrex9
Well-Known Member
I did similar last year and bought a new build empty commercial unit with flat above.
You will need to do a business plan as the vast majority of banks will ask for one, unless maybe you are putting in an extremely healthy deposit. For a business loan, most banks will also ask for a 30% deposit towards the project (that's what I put in). You might be able to get this down to 25% if you shop around. If you are able to get two mortgages (one for shop and one for flat) this could also reduce the aggregate deposit %.
My business plan consisted of best estimate of projected turnover and expenditure. Here is a rough layout of headings that I did, plus I've looked at the nominal ledger on my current accounts that I do on sage so I'll try not to miss anything. Some items may not be applicable to you:
Turnover
- Sales Revenue (treatments inc. pamper parties/wedding call outs etc..)
- Sales Revenue (retail stock sales)
- Rental Income (from flat)
Expenditure
- Stock purchases (treatments)
- Stock purchases (for retailing)
- Salaries (inc. Employer's National Insurance Contributions)
- Business rates (44% of rateable value. n.b. I would assume the rateable value would fairly low so you can also claim 50% small business relief, assuming you don't already own another commercial property)
- Water (Usage/Sewerage)
- Water (Surface Water and Highway Drainage)
- Electricity
- Gas (if applicable)
- Training
- Travel (call outs/training)
- Telephone + Internet?
- Card Machine Charges
- Cleaning (I pay for a weekly window clean)
- Depreciation (on fixed assets - fixtures and fittings i.e. salon furniture, carpet, shop signage etc.. use a 3-5 year straight line method)
- Maintenance/Other Expediture (Allow a bit in for cleaning materials, repairs, tea, coffee, milk, towels etc..)
- Mortgage (I used the BBC's mortgage calc to work this out)
- Subscriptions (e.g. Magazines for salon/FSB etc..)
- Stationery
- Advertising & Website
- Insurance (building, contents & public/personal liability)
- Accounts/Payroll (unless you do it yourself to keep costs down. I do.)
- Business banking (first 1-2 years normally free though and then free again if you are a member of the FSB and use the free co-operate bank services)
I put in as much information as possible so that it looked a very serious proposal (it was) and also so that the bank couldn't turn round and claim I'd missed anything.
I did mine on Microsoft Excel so that I when I put a few formulas in, it did totals and projected profit figures for me after putting in values next to each turnover/expenditure item.
You will need to do a business plan as the vast majority of banks will ask for one, unless maybe you are putting in an extremely healthy deposit. For a business loan, most banks will also ask for a 30% deposit towards the project (that's what I put in). You might be able to get this down to 25% if you shop around. If you are able to get two mortgages (one for shop and one for flat) this could also reduce the aggregate deposit %.
My business plan consisted of best estimate of projected turnover and expenditure. Here is a rough layout of headings that I did, plus I've looked at the nominal ledger on my current accounts that I do on sage so I'll try not to miss anything. Some items may not be applicable to you:
Turnover
- Sales Revenue (treatments inc. pamper parties/wedding call outs etc..)
- Sales Revenue (retail stock sales)
- Rental Income (from flat)
Expenditure
- Stock purchases (treatments)
- Stock purchases (for retailing)
- Salaries (inc. Employer's National Insurance Contributions)
- Business rates (44% of rateable value. n.b. I would assume the rateable value would fairly low so you can also claim 50% small business relief, assuming you don't already own another commercial property)
- Water (Usage/Sewerage)
- Water (Surface Water and Highway Drainage)
- Electricity
- Gas (if applicable)
- Training
- Travel (call outs/training)
- Telephone + Internet?
- Card Machine Charges
- Cleaning (I pay for a weekly window clean)
- Depreciation (on fixed assets - fixtures and fittings i.e. salon furniture, carpet, shop signage etc.. use a 3-5 year straight line method)
- Maintenance/Other Expediture (Allow a bit in for cleaning materials, repairs, tea, coffee, milk, towels etc..)
- Mortgage (I used the BBC's mortgage calc to work this out)
- Subscriptions (e.g. Magazines for salon/FSB etc..)
- Stationery
- Advertising & Website
- Insurance (building, contents & public/personal liability)
- Accounts/Payroll (unless you do it yourself to keep costs down. I do.)
- Business banking (first 1-2 years normally free though and then free again if you are a member of the FSB and use the free co-operate bank services)
I put in as much information as possible so that it looked a very serious proposal (it was) and also so that the bank couldn't turn round and claim I'd missed anything.
I did mine on Microsoft Excel so that I when I put a few formulas in, it did totals and projected profit figures for me after putting in values next to each turnover/expenditure item.
