Car garage commercial mortgages

With more than 40 million vehicles registered in the UK at the end of 2022, and the growth of electric vehicles driving a new motoring boom, it’s a good time to be in the automotive industry.

As sales and vehicle service needs grow to reflect the surge in motorcycles, cars, vans, and trucks on UK roads, so established and startup automotive businesses need more and bigger premises. However, buying, expanding or refurbishing showrooms, garages and filling stations is not cheap, and no matter if they’re big, small, new or old, most automotive businesses will need to finance their transaction. This is where commercial mortgages for car garages come in. Don’t put your purchase or expansion plans on hold because of cashflow issues – use a car garage mortgage to fuel your growth ambitions and get your business on the road.

What is a car garage mortgage?

Car garage mortgages are commercial property loans used to buy existing car garages, petrol stations, MOT and car repair centres, tyre shops, or new and used car showrooms. They may also be used to pay for the construction of new automotive trade and retail properties and to purchase or build properties that sell commercial vehicles or provide maintenance services for vans, trucks and other forms of haulage transport.

Commercial mortgages may be secured to cover up to 90% of the LTV, (loan to value – a comparison of the size of the loan to the value of the property), and they can be repaid over 1 – 30 years. 

Other property loans for automotive businesses include development finance – typically used to pay for refurbishment and expansion costs – and bridging loans – short-term financing to bridge the gap between one property loan ending and another starting, or to cover the period from the point of property purchase until a long-term car garage mortgage has been secured. (Bridging loans are also a popular way to buy commercial property at auction – as they allow the buyer to bid with confidence knowing they have funds available to cover the purchase).

Who are car garage mortgages for?

Car garage mortgages are special property loans tailored for businesses in the automotive trade. This includes new and used car dealers, petrol station owners, repair shops, body shops, and traders who sell or maintain commercial vehicles. 

What do you need to get a car garage mortgage?

If you are seeking funds to buy, build, expand or refurbish property for an automotive business, the lender will need full details of the property, any relevant business accounts, including fixed supplier or service agreements, and a detailed business plan. Past experience in the automotive trade is also useful, though not mandatory. Additional to these core requirements, most lenders will seek the following information:

  • Most recent three-years bank and tax records. (Business account if you are an established garage owner, personal account for entrepreneurs launching their first automotive business).
  • Cashflow forecast.
  • Profit and Loss Statement and recent Balance Sheet. (Established garage businesses).
  • Details of any existing debt.
  • List of major customers and suppliers.
  • List of any assets, such as property or inventory.

Top Tip: Some lenders may ask for a personal guarantee by the business owners or directors to secure the loan. If they do, they will check their personal credit scores. Don’t get caught out by an error on your credit report, always check your business and personal credit scores before you apply.

How to find the right mortgage for your garage

Mortgages for car garages are a niche financial area, with differing rules of application. Automotive businesses seeking this type of funding may find themselves forever searching and making applications to lender after lender. The delays this can create could cause you to lose the property or land you are seeking to finance. Instead, working with a broker, who can access car garage mortgages from a wide range of lenders is a better way to go. No more cold calls and endless demands for information. Even if you’ve been turned down elsewhere or have bad credit, simply tell us what you need and leave the rest to us. 

Get started with Swoop

Don’t get stuck in first gear. Register with Swoop to find the best rates, the best terms and the best car garage mortgages and finance. 

Testimonials

Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

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