Commercial mortgages
We arrange commercial and semi-commercial mortgages for trading businesses buying their own premises, investors buying let commercial property, and owners refinancing or raising capital. We are a commercial mortgage broker based in Birmingham, working with clients across the UK and a panel of 110+ lenders, with no broker fee.
Business premises and commercial investment
What we arrange
A commercial mortgage is secured on property used for business rather than as your home. Each case is assessed on its own merits: the business or the rent, the property, and the people behind it.
Commercial lenders vary more than residential ones, so our job is to find the lenders whose appetite fits your case before you apply.
We can help with
- Buying premises for your own business, so you stop paying rent
- Buying shops, offices or units let to business tenants
- Semi-commercial property, such as a shop with a flat above
- Refinancing commercial property when a loan ends or to get better terms
- Raising capital against property you already own
- Borrowing as a limited company, partnership, sole trader or individual
£0
broker fee, at any stage
110+
lenders on our panel, commercial lenders included
25%+
deposit many commercial lenders often look for
UK-wide
advice from our office in Birmingham
Property we arrange commercial mortgages on
Lender appetite depends heavily on the type of property. These are the cases we see most.
Retail
Shops and showrooms
High street units, parades and showrooms, bought to trade from or to let. Location and the strength of the lease carry a lot of weight.
Offices
Offices and surgeries
Office buildings, suites, and professional premises such as dental or medical practices. Local demand and energy rating matter.
Industrial
Warehouses and industrial units
Workshops, light industrial and storage units. Lenders look at condition, access and how easily the unit could be re-let.
Mixed use
Semi-commercial property
A shop, café or office with flats above or behind. More lenders consider these than pure commercial, and terms can be closer to buy-to-let.
Specialist
Trading businesses
Pubs, hotels, restaurants, care homes and nurseries, where the building and the business are valued together. Fewer lenders, and your experience in the sector counts.
Short term
Land, auctions and refurbishment
Land, development and property that needs work usually start with short-term finance, then refinance onto a commercial mortgage.
Bridging finance →Owner-occupied, investment or semi-commercial?
The kind of loan shapes what a lender wants to see. Here is where each one focuses.
| Who it suits | What lenders focus on | |
|---|---|---|
| Owner-occupied commercial mortgage | A trading business buying the premises it works from | Trading accounts, and whether profits cover the repayments with room to spare (debt service cover) |
| Commercial investment mortgage | Investors buying property let to business tenants | The rent, the length of the lease left to run, and how financially strong the tenant is |
| Semi-commercial mortgage | Buyers of mixed-use property, such as a shop with a flat | Both parts: the commercial income and the residential element, including how the flat is let or lived in |
Getting ready
What lenders typically ask for
Requirements differ between lenders and cases, so treat this as a starting list, not a guarantee of what will be enough.
- Business accounts, often two or three years, plus recent management figures
- A business plan and projections if the business is newer or changing
- Lease and tenant details for let property, including rent and lease length
- A statement of assets and liabilities for the directors or owners
- Personal guarantees, which lenders often ask directors to give on company borrowing
- A commercial valuation, usually by a RICS-registered surveyor and normally paid for by you
Deposit, terms and rates
Commercial lenders often look for a deposit of 25% or more, and some lenders go up to about 75% of the price or valuation. Pubs, hotels, land, a new business or a short lease can mean a bigger deposit. Terms of up to 25 to 30 years are available with some lenders, although shorter terms are common.
Rates are priced case by case, usually as a margin over Bank Rate or SONIA, with fixed rates also available. The margin depends on the deposit, the property, the loan size and the strength of the business or tenant. Our guide on how commercial mortgages work covers rates, criteria and the pros and cons in more depth.
What it costs to arrange
Our advice is fee-free. The costs to budget for usually come from the lender, the valuer, the solicitors and the tax system:
| Cost | What to expect |
|---|---|
| Arrangement fee | Charged by the lender, often a percentage of the loan |
| Valuation fee | Usually higher than for a residential property |
| Legal fees | Often for your solicitor and the lender’s |
| Stamp duty | In England and Northern Ireland, non-residential and mixed-use rates are 0% up to £150,000, 2% on the next £100,000 and 5% above £250,000. Scotland and Wales have their own taxes |
| VAT | May be added to the price if the seller has opted to tax the property |
We are not tax advisers and this is not tax advice. The stamp duty and VAT points above are a general summary of published rates at the time of writing, and we give no warranty on the amount you will pay. Speak to an accountant or tax adviser about your own circumstances, and your solicitor will confirm what is due.
How it works
A first conversation
We ask about the property, the business or tenant, the deposit and your timescale. There is no fee and no obligation.
Indicative terms
We approach lenders whose appetite suits the case and come back with indicative terms: loan size, rate basis and fees.
Application and valuation
We present the case with your accounts, plans and lease details, and the lender instructs a commercial valuation.
Offer and completion
The lender issues a facility letter, the solicitors complete the legal work and the funds are released. We stay with the case throughout.
Why use a commercial mortgage broker?
Commercial lending is less standardised than residential. Criteria, maximum loan sizes and appetite for each sector vary widely, and many lenders do not publish them in full.
We check which lenders are likely to say yes before you apply, present the case the way an underwriter wants to see it, and deal with the questions that come back. If a buy-to-let mortgage or specialist residential lender would suit the property better, we will tell you.
Most commercial mortgages are not regulated by the Financial Conduct Authority. Some semi-commercial mortgages to individuals can be (see the questions below), and we will tell you if yours is.
Commercial mortgage questions
What deposit do I need for a commercial mortgage?
Often 25% or more of the price or valuation, whichever is lower. Specialist property such as pubs, hotels or land, a newer business or a short lease can push that higher. A strong trading record or a long lease to a sound tenant can help you borrow closer to a lender’s maximum.
Can I get a commercial mortgage for a new business or start-up?
Sometimes, but fewer lenders will consider it. Expect a larger deposit and closer attention to your experience in the sector, your business plan and projections, and your personal assets.
Can I buy commercial property through a limited company, SIPP or SSAS?
Many commercial mortgages are arranged through limited companies, and lenders usually ask directors for personal guarantees. Some lenders also lend to pension schemes that buy commercial property.
Buying through a pension has its own rules, tax treatment and risks, so you need specialist pension advice before going ahead. We can look at the mortgage side, but we do not advise on pensions. Company directors may also find our guide for directors and the self-employed useful.
Are commercial mortgages regulated?
Most are not. A mortgage is only FCA-regulated if you borrow as an individual or trustee and at least 40% of the property is used, or will be used, as a home by you or a close family member. That can apply to some semi-commercial purchases, such as living in the flat above your shop. Loans to limited companies are not regulated mortgages.
How long does a commercial mortgage take?
Usually longer than a residential mortgage, and we will not promise a date. The commercial valuation, the review of accounts and leases, and the legal work all take time. Having your paperwork ready at the start is what shortens it most. If you have a hard deadline, bridging finance may be worth discussing.
Looking at a commercial property?
Tell us about the property and the business or tenant, and we will tell you honestly which lenders are likely to consider it and what they will want to see. The advice is fee-free.