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Can I get a business mortgage?
Business mortgage lenders (often referred to as commercial mortgage lenders) consider applications differently, depending on what the property is for.
If you want to run your own business from the property, this is referred to as being an “owner-occupier”.
In this situation, the mortgage payments are dependent on you running a profitable business. Lenders will look at your experience in running your business and the financial history of your business, to give them confidence to lend.
If you are buying a business premises so you can let it out and get an income from the rent, this is referred to as an “investment-only” scenario.
In this case, a lender will look at the rental income the property is due to receive. Having experience in property can help strengthen an application. Typically you would be a homeowner, and possibly have a buy to let property or a commercial property. But, even if you do not have experience and are a first time buyer, we may be able to help you.
Chat to our expert broker team to discuss your situation.
Factors that may affect your application
- Your credit history
- Not having enough money for a deposit (you can use cash, or equity in other property you own)
- The value of the property being less than you expected
Chat to our advisors on live chat, via the phone, or get a call-back we're here to help.
Today's rates
Business mortgages are available with variable or fixed interest rates. High street lenders tend to offer variable rates and challenger banks tend to offer fixed rates. Use our mortgage calculator to compare today’s rates.
Eligibility
- First time buyers to experienced landlords
- You must be over 18 years old
- Minimum deposit 25% of the property value
- Upper age limits at application are flexible
- Low personal incomes are accepted
- Property, pension and employment income is OK
Ready to get started?
Your personal advisor will call. Direct lines start 01603. Get today's rates, help, or apply. Lender terms provided in as little as two hours!
About business mortgages
A business mortgage is a loan used to buy a property that one business or several businesses will operate from. They are more commonly called commercial mortgages.
If you want to buy a property and don’t have the full amount in cash, or you have a mortgage and want to refinance or raise cash from the equity in the property, the most appropriate type of loan is usually a mortgage.
You can borrow up to a maximum of 75% of the value of the property, so you will need a deposit of at least 25% and possibly up to 40%. The minimum loan is from £50,000 with no real upper limit, so long as you can demonstrate you can comfortably afford the monthly payments.
Taking out a business mortgage via a limited company
You can take out a business mortgage in your personal name, or via a limited company.
If you invest via a limited company you will have more product options if the company structure is set up purely for property investment. This is because lenders like the borrowing to be separate from other activity, to limit their risk.
If a trading business operating within the same limited company structure fails, then there is the possibility that the property might be used to pay off a debt.
When a lender offers you a mortgage, the risk of you not repaying the debt is offset by a legal charge being placed on the property. This legal charge gives the lender the right to take possession of it if you fail to pay.
Therefore, if the company is only used to invest in property, this reduces the risk.
Other ways to raise money for your business
If you need money for your business, but do not have equity in your business premises to raise capital from, it is possible to raise funds from your residential home instead. This is called a homeowner business loan. You can only get this type of loan to help grow a business, you cannot use it to fund a failing business.
We work with a wide range of business mortgage lenders, including:
Why choose Commercial Trust as your business mortgage broker?
Apply with ease by phone
It couldn't be easier to secure a mortgage with our expert advisors. Ask all your questions and arrange an application on the phone from your sofa.
World class customer service
We'll find you a great deal and take all the admin work off your shoulders, so you can relax while we get your mortgage completed. All the while giving you progress updates.
Specialist expertise
Our whole focus is landlord finance solutions, which means that you will get a recommendation based on detailed knowledge of the latest deals available.
We can help you with...
- Borrowing up to 75% loan to value
- Mortgages with no minimum income requirement
- Mortgages that are flexible on applicant upper age
- Mortgages with dual representation solicitors
- Owner-occupied mortgages
- Investment mortgages based on rental income
- Complex cases
- Portfolio deals
- Limited company applications (trading and SPV)
- First time landlords applications
- Capital repayment or interest-only
- Raising capital from equity, for a range of uses
Costs involved in a business mortgage
Lenders may charge you for the valuation conducted on your property. They often also charge a product fee, sometimes this can be added to the mortgage.
You will need a conveyancing solicitor who will charge fees. Read our guide to choosing a conveyancing solicitor.
We charge a broker fee for our work. You pay in two parts. A booking fee, once we have found you a mortgage deal, at application. The majority of our fee is paid at completion of the mortgage.
Every mortgage comes with monthly mortgage costs based on the mortgage interest rate the lender charges. These are paid on either an interest-only or capital repayment basis.
How to apply
1
Tell our advisors about the property you are investing in, your needs and circumstances. If you have credit concerns, chat to us about them, so we can put you with the right lender.
2
Your advisor will find the best possible deal from a search of thousands of products. They will get you a lender decision in principle, this requires a soft credit search (occasionally it is a hard credit search).
3
Your advisor will call to discuss the product they have found for you. You will be presented with one mortgage, which is the best match for all your needs and offers you the most cost effective option.
4
On your instruction, your advisor will submit your mortgage application. Your account manager then does all liaison and administrative work to complete the deal, whilst keeping you updated at every step.
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Frequently asked questions
A business mortgage is a loan secured against a property that a company operates from. You can own the property and run your business from it, or buy the property and let it out to a business or several businesses to operate from.
You can get a mortgage for a business, if you are using the loan to buy property that the loan is secured against. You can borrow the money to invest in all sorts of business premises, from a shop to an office, a medical practice to a warehouse, a storage unit to a hotel. Essentially any building a business is run from.
You will need a deposit of 20-40% to get a business mortgage. The deposit amount is based on the risk linked to the borrowing scenario.