Commercial Loans
A commercial mortgage is a specialised commercial loan in which the lender has a legal claim over the property until the loan has fully been repaid.
Please note that our Commercial finance information is not typically regulated by the FSA
A commercial mortgage is usually the best way to finance the purchase of land and/or buildings for your business, as it probably provides the most flexible and affordable financing solution.
Buying commercial premises can be a good investment. Owning a property gives your business stability, and the property itself can become a significant asset.
Increasingly we have seen property investors moving into commercial property, many of these investors will have formerly been Buy to Let property portfolio investors.
For the majority of Buy to Let investors their first step into commercial investment will be via semi-commercial properties i.e. a property with a residential (Buy to Let only) and commercial element such as a retail unit with a flat above it.
Investors should consider that although there is a residential element involved in the purchase, financial institutions will treat the property as a commercial proposition and the rates and terms available will reflect this.
There are many reasons why you might need a commercial mortgage. For example, if you are starting-up, or buying an existing business that is tied into the property, such as:
- Multiple Buy to Let property
- Hotel or pub
- B&B
- Retail out-let
- Takeaway
- Post office
- A surgery
Or you might be an established business seeking to expand and therefore looking for larger premises, such as:
- Offices
- Warehouses
- Factories
A lot banks and building societies offer commercial mortgages as do many specialist commercial lenders. Some lenders may accept applications where there is an adverse credit history, but most require a positive personal credit rating and clear evidence that your business is creditworthy. It also depends on:
- Your business circumstances at the time
- The long term projections for your business
Most commercial mortgage schemes have variable rates. This means that the interest rate varies in line with the Bank of England base rate. Your repayments may rise or fall, and you should budget accordingly.
