Are you looking to arrange finance to buy a Post Office? Then there are a number of factors that you need to consider when looking for lenders.
Despite headlines in the newspapers about post offices closing down, they can still be a very profitable business to own or run. In the majority of cases the Post Office is well established and has been around for many years. This past trading history can be beneficial to a loan application, along with other benefits such as a post masters salary.
So lets look at what information is important when looking for finance to buy a post office.
Key Factors When Financing A Post Office Purchase
The following points need to be considered carefully when seeking finance to buy an established post office.
Freehold or Leasehold Post Office?
An important consideration when buying a Post Office is whether its freehold or leasehold. So are you buying the building as well or just the leasehold business on it own. This makes a big difference to what type of finance you need.
Its possible to get a business loan in either scenario but each requires a different approach. Lenders will likely prefer a freehold purchase as the building can be offered as security, however the purchase price will likely be much higher.
For a leasehold purchase a sizeable deposit may be required and/or additional security such as a charge over another property.
Before applying for finance you will need to get a copy of the most recent years financial accounts. Banks and lenders are going to want to see profits regular profits in past trading figures.
The good news is that postmasters get paid a salary by Post Office Ltd to run the service. This will support your finance application as it is a guarnateed form of income.
However even if you are buying an existing Post Office franchise, you must still make a full application. You will need to do this before completing the purchase.
More information can be found here on the “Run A Post Office” website.
Other Post Office Income
As well as revenue carrying out postmaster duties, a Post Office can also have a wide range of additional revenue streams. It may be that their is an opportunity to add or grow revenue, you shoudl include this in your business plan and cashflow projections.
- Convenience Store
- Food & Drink
- Cashpoint Sales
- Travelcard Sales
- Lottery Tickets
Banks and lenders will likely be looking for past experience either running a business or related retail shop experience. This will help support your credibility as the new owner.
Commercial Finance Options When Purchasing A Post Office Business
There are a number of potential commercial finance options available when buying an existing Post Office business. From a Long term commercial mortgage, secured against the freehold. To a a short term bridging loan for 12-18 months to allow the purchase to take place.
Get in touch to discuss on 0161 5469128
Apply For Finance To Purchase A Post Office
Speak to one of our team today to assess your funding options for your Post Office purchase. We are an independent commercial finance brokers and can search hundreds of banks/lenders to find you the funding you need.
Tel: 0161 5469128
Submit Your Details