In the broadest sense commercial property finance funds the purchase or re-finance of a commercial property.
Where the borrower also trades from the premises then ordinarily the loan is referred to as a “commercial mortgage”. Where the property is leased out to a tenant the loan is often referred to as a “property investment loan”.
Loans tend to be over a longer term – generally 10-25 years – much like a personal buy-to-let mortgage, and will be secured, meaning the lender will take a legal charge over the property.
Loan to values tend to be slightly lower for commercial investment loans compared to owner-occupied commercial mortgages, being anything up to 75% LTV (with 25% contribution coming from savings), but typically lower.
A commercial property investment loan can be for any type of commercial-use property – industrial units, retail shops, offices, surgeries, restaurants and so on, as well as mixed-use properties that have both commercial and residential elements.
