Commercial Mortgages & Property Finance
If you're planning to purchase or refinance a commercial property, build a new development, or you're just looking for market beating bridging rates, let Growth Business Finance handle the heavy lifting. Our team of experts will provide you with a comprehensive range of options for commercial mortgages, bridging, development finance and BTL, ensuring you find the best financing solution tailored to your needs. We have a proven track record in securing the best rates on the market.
No matter your needs, the GBF team of experts will collaborate with you, leveraging their knowledge, experience, and relationships to present your proposal to lenders to secure the best rates on the market guaranteed.
Commercial mortgage calculator
Utilise our straightforward commercial mortgage calculator to estimate your potential monthly repayments and the total interest you’ll incur over the loan term.
Just input the amount you wish to borrow, the interest rate, and the repayment period, and you’re all set to see your results!
Commercial mortgage calculator
Simply add the amount you’d like to borrow, the interest rate, and how long you’d like the repayments over and away you go!
Provide us with your details below and one of our team of finance professionals will contact you to discuss your requirements
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What is a commercial mortgage?
A commercial mortgage is a loan issued by a lender, secured by a legal charge on commercial property. These mortgages are appealing because they can serve various purposes, such as financing the purchase of commercial real estate, unlocking equity to expand or invest in your business, refinancing to take advantage of lower interest rates or monthly payments, and consolidating existing debts into a single, manageable monthly payment.
What types of commercial mortgages are there?
There are three types of commercial mortgage:
When are commercial mortgages used?
Commercial mortgages are commonly utilized to purchase or refinance both residential and commercial properties, as well as trading businesses. They are often the most cost-effective borrowing option since lenders secure their loans with a legal charge against the property or properties provided as collateral. These loans typically start at £50,000, with various lenders offering maximum limits that range from £3 million to £50 million.
Also known as business mortgages, commercial mortgages are medium to long-term loans that generally last from three to 25 years. Most lenders require a minimum deposit of 25% to secure a loan, but 100% financing may be available if additional security is offered in place of a cash deposit and further affordability checks are passed.
Commercial mortgages can enhance your business by funding:
Property purchases
Such as a commercial tenant buying their freehold or relocating your business to larger premises.
Purchasing existing trading business
Such as a trading hotel or care home.
Business expansion
Release equity in existing property to invest in other assets or businesses.
Property development
Structured development facilities for the construction of property/ies.
Property investments
When you will allow an unconnected 3rd party to take ownership of the property for an agreed period, for which you’ll receive a rent.
Business refurbishments
Property improvement or significant capital expenditure, such as extending a hotel to create additional bedroom stock.
Typical features of a commercial mortgage
Commercial mortgage criteria differ significantly among lenders. Unlike residential mortgages, which are typically standardized “off-the-shelf” products, commercial mortgages are customized solutions designed to help small and medium-sized enterprises (SMEs) or property investors meet their specific objectives. This flexibility allows lenders to assess the unique needs and circumstances of each borrower, tailoring the terms and conditions accordingly.
The interest rate for a commercial mortgage is influenced by the lender’s assessment of the perceived risk associated with the loan. Lenders typically offer rates that range from 3% to 5% above the base rate, with higher-risk borrowers closer to the 5% mark.
Key factors that lenders consider include affordability—whether the business generates enough income or profit from sustainable sources to cover loan repayments—and the loan-to-value (LTV) ratio, which indicates the lender’s exposure relative to the value of the property or business being offered as collateral. Additionally, longer-term loans may be viewed as higher risk, as it can be challenging for lenders to determine whether the income used to repay the loan will remain sustainable over time.
One similarity between commercial and residential mortgages is that both can be offered as variable rate or fixed rate loans, although the options may differ from lender to lender.
Commercial mortgages are generally considered higher risk than standard residential mortgages, which is why they usually come with higher interest rates. However, they often provide better rates than traditional business loans, as lenders have the added security of the commercial property in the event of a loan default.
Our knowledgeable brokers are here to help you navigate this often complex market. Click here to start your application or call us today for assistance.
What types of businesses can get a commercial mortgage?
Thanks to a broad array of lenders and a diverse debt finance market, all of the aforementioned financing options are accessible to sole traders, partnerships, large partnerships, limited companies, limited liability partnerships (LLPs), trusts, self-invested personal pensions (SIPPs), and small self-administered schemes (SSASs).
While there is a limited interest in financing for offshore companies, options do exist within the market for those seeking such arrangements.
What do I have to do to qualify?
Each lender in the market has distinct criteria and risk appetites, which can change over time. As a result, small and medium-sized enterprises (SMEs) and property professionals will benefit greatly from having a specialist broker on their team to help navigate the available options at any given moment. The six key areas that lenders typically examine when evaluating an application include:
- Personal and business credit history
- Experience and background of the borrowers and/or the key people involved in the business (such as the management team)
- The type of property/business you wish to purchase or refinance
- The proposed loan-to-value (LTV)
- Affordability: can the property/business afford to repay the borrowing it has requested?
- Sustainability: is the income source to repay the loan sustainable for the full duration of the proposed loan(s) facility