What are commercial mortgages?
A commercial mortgage is a loan used for buying or refinancing a commercial property like an office, shop, or factory.
These loans can be secured against a property or land that you own, so lenders have security in case you cannot pay the loan back. This means they may be less strict with their qualifying criteria.
Our team have helped many business owners get finance, allowing them to achieve their goals. We therefore have the skills and expertise to support you and help you get the outcome you are looking for.
Solutions start from £30,000 and there is no limit on maximum loan sizes, so you can get the funding needed to cover your plans.
Why choose a commercial mortgage?
Many landlords invest in commercial properties to diversify their portfolio. This can be due to the returns available, as they can offer more stable rental income because these units often attract longer term lease commitments. Or it may just be because an unmissable opportunity becomes available.
As a business owner, you may sometimes find yourself in a position where you need money to help you with business costs. It could be that you’re looking to start up a new business and need funds to do this. Alternatively, you might already have a business that you are looking to expand, and so you need finance to help you with this. In these situations, commercial loans could help you get the funding you need and allow you to achieve your goals.
To help with buying or remortgaging these properties, a specialist commercial mortgage broker or lender is required.
What are the different types available?
There are two main types of business finance you can get. These are:
- Commercial mortgages – Funding for properties that are used for business related purposes.
- Semi-commercial mortgages – Loans for properties that have both residential and commercial elements to it. For example, a shop which also has flats above it.
Although these finance solutions are very similar, they can differ. Lenders may offer different interest rates and terms depending on which product you get.
Understanding what criteria and products you may be eligible for can be done by speaking with a mortgage advisor, like one of our experts. Our lenders offer both funding types and have flexible product criteria, so we may have a solution for you.
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What can I use commercial mortgages for?
These loans can be used for any type of business plans you have in mind, such as expanding or buying a new business office.
The areas we can assist with are:
- Warehouses and industrial units
- Retail outlets, restaurants, food chains and public houses
- Day-care nurseries for children
- Single freehold units
- Holiday homes for investment reasons
- Creating a new residential complex
- Portfolios of commercial properties
- Finance for companies which need consistent cash flow (asset finance)
Do I qualify for a commercial mortgage?
Determining whether you qualify for this solution is easy. Put simply, if you have a business or want to start one, you can apply.
Qualifying criteria will be dependent on the lender, so you may find that some are stricter than others. It is important that you research your options carefully to understand where you might be accepted.
Another factor you need to consider is property type. If the property has commercial and residential uses, you will need a semi-commercial mortgage. However, if the property is only for business purposes, you will need a commercial mortgage.
Our team have a detailed understanding of each lender’s criteria, so they are experts at sourcing and organising these solutions.
How much could I borrow?
Your lender will determine loan sizes. It will be influenced by the amount of funding you need and your personal circumstances.
We have loans that start at £30,000, with no cap on the maximum amount. However, we always want to make sure we find you a product you can comfortably afford, so the loan size will be determined once we understand your situation.
To gain an idea of what you might be able to get, you can call our experts on 0800 032 3535 or send us an email.
How long can these loans last?
Repayment terms will vary depending on the lender and your circumstances. There are both shorter and longer repayment periods available, so you can find a product that matches your plans.
Our team have access to products with terms ranging from 2 to 30 years, meaning that we can find a solution personalised to your needs.
Challenges of a commercial mortgage
Whilst these loans can be great, you should watch out for a few things.
Firstly, commercial mortgages often require a higher deposit than residential mortgages. This can be a challenge for businesses that do not have a lot of money to hand. It might help to shop around before applying, and be prepared to save up a larger deposit.
Finally, commercial mortgages may be harder to find, as you will need to use a specialist broker or lender.
By being aware of these issues when applying for a commercial mortgage, you will be able to navigate them more confidently.
Find out more in our blog ‘Getting a commercial mortgage: What to look out for’.
How do I apply?
Applying for a commercial mortgage is simple. All we need is a bit of information on your needs and we can start the process.
Follow the steps below for a hassle-free application process:
- Determine how much you need to borrow
- Inform our advisors by making an enquiry through email or calling 0800 032 3535
- Our team will handle the rest, from locating products to speaking with the lender.
We're here for you at every stage. If you ever want to understand a bit more about the solutions available to you, call our team.
