Frequently Asked Questions Commercial Property

Some of our common questions

Answers to the most frequently asked questions about our Commercial Property products and services.

Loan Features

What assets do you lend on?

We lend on income producing commercial investment properties where the rent roll is sufficient to support the financing – this includes offices, retail units, light industrial units, logistics units, multi-family residential and most other types of commercial investment property. Our bias is for property located in the city or commuter environs of Dublin, Cork, Limerick, or Galway, although we selectively consider well located provincial property with good cashflows.

We selectively consider bridging and other specialised proposals.

We don’t lend on:

  • Loans of <€1m
  • Construction or development situations
  • Assets outside the Republic of Ireland
  • Nursing homes, undeveloped land, or agricultural land or buildings

What size of loans do you offer?

€1m – €10m, and up to €15m at connection level.

Are your decisions locally made?

Yes, all our decisions are made by our executive team. We are lending our own funds and are not required to refer to our shareholders or lenders for credit approvals.

What are your main lending parameters?

We focus on repayment capacity, which generally requires that net rent after tax is 1.10 x debt service obligations. We do not cash sweep this excess, so any surplus after debt service is typically retained by the borrower to reinvest in the property or take as drawings.

We have financed situations where our loan is providing the majority of the overall funding requirement, although we normally limit LTV to 75%. In practice where the debt requirement is high, this means that there is equity value in the asset being financed over and above our loan and/ or collateral or makeweight security is involved.

What does a loan cost?

Our Interest Rate is typically variable, and linked to EURIBOR, with a floor amount of 0.25%. The following shows indicative capital plus interest monthly repayments per €1m of borrowing, plus expected principal balance outstanding at the end of year 5:

  25 year repayment profile* 30 year repayment profile*
 Interest Rate Monthly repayment Balance at year 5 Monthly repayment Balance at year 5
6% €6,443 €901,258 €5,996 €931,880
7% €7,068 €913,361 €6,653 €942,471

* Up to 20/25 year profile on non-residential property, and up to 30 year profile on residential property

We operate drawdown fees (sometimes called arrangement fees) which are priced individually, normally payable on the drawdown of a loan. In line with market practice, we ask that Borrowers discharge our legal and valuation costs.

We operate redemption fees which are priced individually and typically include a make-whole payment for transactions that repay within the first two years.

In cases of arrears or missed payments, standard scale transaction charges of €100 apply to each unpaid cheque/direct debit; to each letter dispatched following non-payment or breach of any term of a loan Facility; and to each visit to ascertain the reason for non-payment or breach of any term of a loan Facility.

Do you lend to trading businesses or sole traders?

Yes, where we lend to owner-occupiers, we generally need the property to be arms-length from the operating entity, which usually involves separating ownership into a separate vehicle and establishing an arms length rent. We are happy to lend to individuals as well as corporate entities, again where the property and the trading businesses are separate.

Loan Process

How do I apply?

We pride ourselves on quick decision making and processes. You can start an application here

How does your loan process work?

We pride ourselves on a responsive, transparent, and pragmatic approach with an experienced and dedicated relationship team who will negotiate the transaction and guide you through the process.
The three steps to loan drawdown are:

Stage 1: Initial Enquiry

  • Completion of enquiry detail
  • Callback from Finance Ireland team to move to Stage 2

Apply Now

Stage 2: Information Gathering

  • Telephone or meeting to discuss supporting information required
  • The property – details of each property being secured, tenancies, rental schedule
  • The proposed transaction – including a summary of transaction cash flows
  • The Principal/ Promoter – including background and financial status

Following receipt of supporting information, an inspection of the Property with the Principal/ Promoter, Indicative Terms, subject to credit approval, will issue, typically within 2 days.

Stage 3: Approval and drawdown of funds

  • Accept Indicative Terms and provide additional information specified
  • Where facilities are offered, a formal Facility Letter will issue within 5 to 10 business days
  • Following acceptance of Facility Letter, work on completion/ drawdown commences *

* In cases where there is time pressure or more complex legal issues connected with the security are likely to arise, the legal process can commence at Stage 2 – in such cases, a payment on account of fees will generally be agreed, which will be offset against drawdown fees.

How do you value properties?

We require a valuation from one of our panel valuers, to include an opinion on open market value, expected rental value and vacant possession value. This will be conducted to international standards, i.e. either TEGoVA Blue Book or RICS Red Book. This process can be considerably shortened where the valuation firm is provided with full property particulars, including maps, floorplans where available, tenancy schedule, copy leases and confirmation on title.

How does the legal process work?

We require confirmation that all properties have good marketable title, and that we are in a position to take a first ranking mortgage. We will specify via a Facility Letter and associated guidelines what is required to enable confirmation on marketable title and security. In some cases remediation work can be required to make a property suitable for financing – we have established processes for this, and our panel solicitors are familiar in working with our customer’s solicitors through such issues.

There is preparatory work that can be done to ensure that a property is suitable for financing; this includes gathering title documents and deeds, performing planning and charge searches, collating leases, planning documentation, and confirming the identity of the property. A specialist input may be required from an architect/ surveyor/ fire consultant to confirm compliance with standards and regulations.

Do you refinance loans or borrowers that were previously stressed?

Yes. In such cases, we will want to satisfy ourselves that the borrower or promoter acted reasonably with incumbent lenders, and that the proposal under consideration is reflective of a clear path to finalisation or significant resolution of any legacy issues.

We run credit checks on all proposals. Cases involving a stressed credit track record of the borrower or promoter require the fullest disclosure early in the process and we will terminate any proposal where we consider we have not had full disclosure.

Other

Who are Finance Ireland?

Finance Ireland Ltd is a privately owned financial services Group. We have businesses that specialise in Commercial Property Lending, Motor Finance, Finance & Leasing (incorporating Hire Purchase, Contract Hire, Vehicle & LCV leasing, Short-term Car Rental), and Agri Finance.

Is Finance Ireland Commercial Properties regulated?

Yes, we operate via Finance Ireland Credit Solutions DAC, a Retail Credit Firm authorised by the Central Bank of Ireland.

What happens if I experience financial difficulty?

We understand that from time to time you may face financial difficulties which may affect your ability to repay your credit agreement with us. It is important that you engage with us to address these financial difficulties. If you find yourself in this situation we would like to bring your attention to our Information Booklet for SMEs in Financial Difficulty which is available for download on our Financial Difficulties page.

What happens if I am dissatisfied?

We aim to provide a transparent, consistent, and efficient service to all our customers. In the event of dissatisfaction, we would encourage you to contact us so we can resolve the situation fairly. However, if you remain dissatisfied, you can contact the Financial Services Ombudsman at:

Financial Services Ombudsman’s Bureau
3rd Floor, Lincoln House
Lincoln Place
Dublin 2
Low Call: 1890 88 20 90
Telephone: (01) 6620899
Fax: (01) 6620890
Mail: enquiries@financialombudsman.ie