Tim, first thing to do is understand what exactly the owner wishes to sell. Is she simply talking about selling the property, or, is she also talking about selling the "business"? If the latter, then you will need to get some input from an accountant to see if the amount she is asking for the goodwill is a reasonable amount, as there are calculations for this.
A lender will give you a Commercial Mortgage for the purchase of the property, and if there was also some goodwill involved, they would be able to take this into account a little. Naturally, lenders do not like lending too much against goodwill, as it is "thin air", and should the business fail, then the goodwill disappears, whereas the freehold will always have a value.
Generally, speaking you are looking at between 70% and 80% LTV (loan to value ratio) on a Commercial Mortgage (where it is the freehold only, would be lower if you were looking at a business), albeit, I came across someone earlier this week who would go to 85% LTV. Naturally, the more you want to borrow, the higher the risk and therefore the more you will pay as far as interest rates are concerned.
Whilst 75/80% is the norm, if you had additional security (another property for example), they would quite happily fund the whole amount.
The lender will look at a few main areas:
-Security - what will happen if the business fails, where will there money from;
-Serviceability - how strong is the business and it's ability to repay the debt. They would be looking for the business to have a good level debt service coverage - the ratio of net profit to loan repayments;
-Management ability - has the borrower got what it takes to run the business.
If you are seriously looking at it, find out how much she is asking and for what exactly. Get a copy of the accounts, and see what level of coverage you have to repay the debt. You would need to have a look at what changes and improvements can be made to the accounts when taking over.
As far as Bank's are concerned, I can guarantee to you that they are all much of a muchness. No High Street bank is better than the next, they all have the same sort of risk models and lending criteria. If you go to the main ones - Barclays, HSBC, Lloyds, RBS for example, you'll get the same replies but on different headed paper! Some of the smaller Banks - Yorkshire/Bank of Scotland for example are a lot better in certain areas and cheaper than the main High Street ones.
The real key is finding someone you trust and think you can work with, It is the individual manager that makes the difference, something I know from personal experience.
Also, there is no reason whatsoever why the debt and account need to be in the same place (and don't let anyone tell you there needs to be).
Unlike getting a personal mortgage, commercial lending is all about having a strong case and making that case properly to the lender and making sure that the "pro's" outweigh the "con's".
Without seeing the accounts and knowing all the details, it is hard to predict what you should look to pay, but I would imagine that something around 2% above base should be achieveable without too much trouble. A lot will depend on whether they view the business as a start-up - which it sort of is and sort of isn't.
Hope that gives you some food for thought, sorry about the length of the reply, but it is quite a detailed area.
