Mortgages for franchises and professional practices

The starting point is always the same: this is an owner-occupier purchase. You trade from the premises, and you want to own them rather than rent them. That story tends to appeal to lenders, because the debt is serviced by a real, trading business rather than by an investment tenant.

The kinds of businesses we help here include:

• Franchise units such as gyms, food and coffee outlets, retail brands and care operators.
• Professional practices such as dental, medical, veterinary, accountancy, legal and pharmacy businesses.

In both cases the aim is to arrange a mortgage that sits comfortably against the income your business already produces, so that owning the premises strengthens rather than strains the operation.

What sets these businesses apart in a lender's eyes is the quality of their income. A settled franchise unit or an established practice usually has a base of repeat custom, contracts or registrations that keep money coming through the door month after month. Lenders pay close attention to this recurring revenue because it points to a stable ability to service the mortgage.

Goodwill matters too. The value built up in a practice's patient or client list, or in a franchise unit's local trade, is a real part of the business even though it is not bricks and mortar. Lenders on our panel who work in these sectors understand how to weigh goodwill and recurring income alongside the property itself, and we help present your business so those strengths are clear.

Not every trade is viewed the same way. Certain professional and practice sectors, thanks to their stable, often regulated income, are seen as lower risk by lenders. Where that is the case, it can translate into keener terms and, in some sectors, higher loan-to-value than a typical business premises purchase.

Practices in fields such as dentistry, medicine, veterinary care and pharmacy are common examples of trades that lenders regard as dependable. That does not guarantee any particular outcome, and every case turns on your own accounts and circumstances, but it does mean the right lender can make a real difference. Part of our job is knowing which lenders lean into your sector and which do not. All figures and terms are indicative and subject to status and valuation.

Buying premises as a franchisee brings a few extra moving parts, and lenders will expect them to be handled properly:

• Franchisor approval: the franchisor often has a say in the site and the arrangements around it, and lenders like to see the franchise relationship on a sound footing.
• Term and the franchise agreement: lenders will look at how long your franchise agreement runs and may want the mortgage term to sit sensibly alongside it, including any renewal expectations.
• The strength of the brand: an established franchise network with a track record can support your application, since it points to a proven operating model.

We are used to these details and will help you line them up before we approach the market, so the franchise element supports your case rather than slowing it down.

As an owner-occupier purchase, the mortgage is underwritten around your business. Broadly, expect lenders to look for:

• Recent accounts showing your trading performance and the recurring nature of your income.
• Evidence of the goodwill and client, patient or membership base behind the business.
• For franchisees, the franchise agreement and confirmation of the franchisor's position.
• A deposit, with the amount and rate indicative and subject to status and a valuation of the premises.

Every practice and every franchise is different, so rather than rely on rules of thumb it is best to talk your plans through so we can point you at the lenders most likely to back them.

We are a finance arranger and introducer, working across the whole market rather than for one lender. For franchises and professional practices, that means understanding your sector, your income and, where relevant, your franchise agreement, then approaching lenders on our panel who genuinely favour businesses like yours. We present your case, help you compare offers, and arrange the mortgage that fits.

We are Lenzie Consulting Ltd. Lending to companies is generally outside the FCA perimeter; where a case is a regulated mortgage contract or involves an individual borrower, we refer it to an appropriately authorised firm. Nothing here is financial, tax or legal advice. If you run a franchise unit or a professional practice and want to own your premises, we would be glad to help.