What is a commercial mortgage?

A commercial mortgage is a loan secured on a property that is not residential, such as offices, buildings, shopping, or industrial complexes. These types of loans are mainly for business owners looking to buy a property for commercial use.

Are you looking for a commercial mortgage?

A commercial mortgage may be necessary or useful if you are:

  • If you are a business owner who wants to buy a property and use it for your company’s operations.
  • You are a commercial property investor who wants to invest in a property and let it to another business you do not own.
  • Investor looking to purchase a multi-unit freehold property and let to tenants.
  • If you own multiple commercial or residential properties, you may be looking to consolidate your mortgage payments under one possibly less expensive mortgage.

How can I get a commercial mortgage?

Depending on your lender, there are several different options. It can take some time and research to find a commercial mortgage, but if you find a lender that is right for you, it will be worthwhile. Your mortgage broker can assist you at this point.

To have a successful application, you’ll need certain documents before you begin your search. You must have the following documents:

  • A record of recent financial statements for banks, liabilities, and assets.
  • The current and projected performance figures
  • Information about your partners and directors
  • At least three years of tax returns

FAQ

Could I still get a Commercial Mortgage if I’ve already had an application declined elsewhere?

We can access products from many lenders, some of which have more flexibility in their acceptance criteria than the High Street Banks. If you have been declined, we may still be able to help. Give us a call for a free, no-obligation chat to find out if we can help you.

 

Can a commercial mortgage be used as an exit to repay a bridging loan?

Yes, if the planned exit is to refinance, then a commercial mortgage could be an option for you if it is a commercial property that requires finance. Bridging loans are often used to fund purchases when a building is not in a mortgageable state, or if there is not enough time to arrange a commercial mortgage and the deal is just too good to miss for any reason (an auction purchase, for example).

Once the building is in a mortgageable condition, you can then refinance and repay the bridging loan. Bridging loans are short-term finance solutions and can be a good stepping-stone, however, considerable financial savings can be had if you can skip the initial bridging loan and go straight to the commercial mortgage.

Can I get a commercial mortgage to buy a property and start my own business?

If you have a higher deposit of around 50% of the purchase price then this is possible. A higher deposit is needed because you won’t have any trading history to demonstrate your ability to repay the mortgage, so the risk of lending is higher.