Commercial Mortgage

Use it to buy, build, expand, remodel, or
even refinance.

Let's get started.

Commercial Mortgage

Use it to buy, build, expand, remodel, or
even refinance.

Let's get started.

Loan Amount

£100k-£5,000,000

Loan Term

Up to 25 Years

Time to Funds

As Little as 30 Days

Interest Rate

From 2.5%

A commercial mortgage could be the foundation of your small business.

Building out your business location is a smart way to increase your assets. Every renovation, upgrade, or expansion adds value to your property, gives you the space you need to streamline operations, or attracts more customers. A commercial mortgage can help you do all this, and more.Remember, there’s more at stake than square footage. Making a smart financing move could help you build a firmer foundation for your small business – both literally and fiscally.

A commercial mortgage could be the foundation of your small business.

Commercial Mortgage: What You Need to Know

A commercial mortgage is a particular type of business loan, where the funds lent are secured against a property. These mortgages can be secured against investment properties, in the case of buy to let rentals, or commercial properties intended to serve as a business premises.

There are many different types of commercial mortgages, with varying degrees of complexity. But if you’re new to the world of commercial mortgages, have no fear. We’re here to guide you through what can sometimes be a puzzling topic, and give you a helping hand to get that mortgage up and running.

Read on and we’ll explain all you need to know about commercial mortgages, from what you need to get one to how long it takes to receive that all-important offer. Ready? Then we’ll begin!

What is a commercial mortgage loan?

A commercial mortgage loan is a mortgage, where the debt is secured via a business property. The property may be the very heart of a business’s headquarters, or it could be a premises which is rented out in order to bring in another income for the organisation.

If you’re wondering what the difference is between a residential and a commercial mortgage, the answer lies in the property itself. Residential mortgages are loans taken out by a single person or family, to purchase a property to live in. On the other hand, commercial mortgages are loans taken out by businesses or landlords, in order to purchase property which will boost their business.

How does a commercial mortgage work?

Like residential mortgages, commercial mortgages tend to be quite long term. Typically, they span between three and 25 years. For businesses, they are an attractive alternative to renting, and they can help to release much-needed capital which can be invested back into a company.

Interest rates on these types of business loans do tend to be higher than you’d expect from your average residential mortgage. But it’s not all bad news – they offer a better deal in terms of interest rates than a regular business loan, as a property is used to secure the borrowed funds.

How much deposit do I need?

Commercial mortgages require a hefty deposit, and that should be a major consideration before the mortgage hunt begins. The amount that you’ll need varies, depending on what the lender thinks you’ll be able to afford, and what type of property you’re hoping to buy.

Usually a commercial mortgage deposit will fall between 20% and 40% of the overall purchase price. Of course, many businesses hope to pay the smallest possible deposit, so it’s well worth shopping around to establish the amount that different lenders are able to offer.

Do I qualify for a commercial mortgage?

Commercial mortgages aren’t available to any business that wants one. All lenders have a strict set of criteria that a company must meet in order to be considered for such a loan. The list of eligibility checks that lenders use to decide whether or not to lend include assessments of a company’s finances, debts and cash flow.

Lenders will calculate a projected income for a company, and consider whether or not they believe that a company will be able to repay their debt. If a premises is to be rented out, then expected rental income will be taken into account at this stage. Following eligibility checks, a lender might adjust the required deposit before proceeding.

How quickly can I get a commercial mortgage?

Arranging a commercial mortgage is a complicated business, and as you might expect there’s a fair amount of paperwork involved! We’re often asked how long it takes to arrange a commercial mortgage, but there’s no simple answer to this one.

If you and your lender pull out all the stops and arrange everything as quickly and efficiently as you possibly can, you’ll likely be looking at a time frame of two to three weeks. Of course, more complex mortgages can often take far longer than this.

Make sure everything runs smoothly by ensuring clear, fast communication with your lender, and keep all your paperwork to hand to help the process along. We bet you’ll be surprised how quickly a commercial mortgage can be arranged.

Need a hand sorting out a business loan for your company? Talk to us . Our team of experts
know all there is to know about commercial mortgages, and we’re on hand to take you
through the options available. Apply today to find out what’s on offer.