Corporate Mortgage

A Corporate Mortgage is a credit facility that offers corporate customers an opportunity to own real property . NBS Bank provides mortgage solutions to individuals, small and medium enterprises (SMEs), corporates, and public institutions in Malawi . The facility can be used to finance the purchase of commercial property, and through the Construction Mortgage product, it also finances the construction of commercial property and the purchase of land if the customer does not already have the land . Corporate customers with unfinished structures can also use this facility to complete those structures .

The facility amount is determined based on the value of the collateral provided. For occupational mortgage purposes, you can access up to 80 percent of the collateral value, while for commercial mortgage and personal loans against mortgages, the maximum is up to 70 percent of collateral value . The actual loan amount will be assessed based on your company's financial standing, repayment capacity, and the value of the property being purchased or constructed.

The interest rate is calculated as the Base Rate plus a Risk-Based margin . If you fail to make payments on time, a penalty interest of Base Rate plus Risk-Based margin plus 10 percent applies . For the Construction Mortgage, an arrangement fee of 2.5 percent of the loan amount applies, along with legal fees and ERIS Management Development fees at a fixed rate . Additional fees include residential or commercial mortgage processing fees, disbursement fees, title deed photocopy fees, mortgage loan statement fees, internal property valuation fees, and loan rescheduling fees . Mandatory insurance includes Life Cover and Property Cover insurance to protect the asset .

For corporate and SME customers, the maximum repayment term for a Construction Mortgage is 60 months, which is five years . For standard commercial mortgages and personal loans against mortgages, the maximum term is also 60 months . This shorter term compared to individual mortgages, which can extend up to 240 months, reflects the business nature of corporate borrowing and aligns with commercial property investment cycles.

The primary security required is real property at an 80 percent loan to value ratio . This means your company must pledge property as collateral, and the loan amount will not exceed 80 percent of the property's appraised value. An insurance policy covering the full value of the collateral is required, with the Bank's financial interest duly noted on the policy .

Corporate and SME applicants must provide several documents to apply for a Corporate Mortgage or Construction Mortgage. These include minutes of the approval by the Board authorizing the borrowing, and an offer from the seller if land is being purchased . A title search is required to verify that land documentation is legitimate. You will need to submit audited accounts, management accounts, and 12 months cash flow projections . The Memorandum and Articles of Association must be provided, along with a Board resolution to borrow from the Bank. If the business is a partnership or trust, partnership agreements or trust deeds are required . A clean Credit Reference Bureau (CRB) report is mandatory. Additionally, you must obtain plans and assessments from approved project managers, including bills of quantities, and a valuation report from a registered and Bank-approved valuer or quantity surveyor .