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Commercial Auction Finance: Everything You Need to Know

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Overview

If you are planning to buy a commercial property from an auction, you will need fast and flexible short-term finance to cover the auction deposit. Commercial auction finance can provide you with the necessary funds to bid on commercial assets with confidence. Lenders can make lending decisions before, during, and after the auction, and the streamlined underwriting process often results in a quick decision and transfer of funds within 24 hours of the loan application. The key to commercial auction finance is speed, which is the result of flexible lending criteria.

Most lenders will lend up to 70% of a property’s value, although some will provide 100% of the asset’s value with additional security. The repayment term on commercial auction finance will typically be anywhere between 6 and 18 months, depending on the lender. There are no restrictions on property size, location, or value, so you can find fast finance for shops, offices, restaurants, pubs, leisure centres, industrial units, warehouses, and pretty much anything else you care to bid on.

How does semi-commercial auction finance work?

If you are looking to buy a mixed-use property, also known as a semi-commercial property, you will need semi-commercial auction finance. This is a bridging loan designed specifically to fund the purchase of part-residential, part-commercial properties, such as shops, restaurants, and offices with flats on the upper floors.

There is a wide range of lenders willing to offer semi-commercial auction finance, but the assistance of a specialist advisor can really help you find the best deal. To find the best deal, you may have to go off the beaten track, away from the high street and mainstream lenders, so intricate knowledge of the market can go a long way.

We can help

We are a specialist commercial finance broker and know precisely which lenders are offering the best commercial auction finance deals at any one time. Please complete our online enquiry form with a few details about your funding requirements, and our advisor will be in touch to offer a free, on-obligation initial consultation.

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Frequently Asked Questions

What are the typical rates for auction finance in the UK?

The rates for auction finance in the UK vary depending on the lender and the borrower’s creditworthiness. Generally, the rates for auction finance are higher than traditional mortgages due to the short-term nature of the loan.

How does auction finance work for purchasing property?

Auction finance is a type of short-term financing used to purchase property at auction in the UK. When buying property at auction, the buyer is required to pay a deposit immediately after winning the bid, usually around 10% of the purchase price. Auction finance can be arranged quickly enough to fit the purchasing timescales of the auction house.

Can a broker assist with finding the best auction finance options?

Yes, a broker can assist in finding the best auction finance options. They have access to a range of lenders and can help find the most suitable option for the borrower’s needs.

Is it possible to obtain 100% financing for an auction property?

Yes, it is possible to obtain 100% financing for an auction property. However, this is dependent on the borrower’s creditworthiness and the lender’s requirements.

What factors determine eligibility for auction finance?

The factors that determine eligibility for auction finance include the borrower’s creditworthiness, the value of the property being purchased, and the borrower’s ability to repay the loan.

What are the benefits of using auction finance for property purchases?

The benefits of using auction finance for property purchases include the ability to complete a transaction quickly, access to short-term financing, and the ability to secure a below-market-value property. Auction finance is also suitable for those who may not meet the criteria for traditional mortgages.

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Legal Information & Disclaimer

This site is an information only site. All of our articles are written by authorised mortgage brokers for the only aim of providing great, useful, mortgage and loan related information. We intent to offer the best possible suggestions and guides however can’t always guarantee to be perfect, please use the information at your own risk. We can’t accept responsibility if things go wrong. Please contact us via our contact page if you see anything that requires changing and we will do so as soon as possible.

The articles on our site do not provide financial advice. Instead, they aim to equip you with the necessary information to attain your mortgage objectives. 

** The content provided in this page is correct at the time of writing. Mortgage and loan lender’s qualifying criteria and rules change frequently so speak to an adviser to confirm the most up to date rules and criteria. The content on the website is not specific advice to each reader, and does not constitute financial recommendations.