Commercial Property Finance

Commercial property finance encompasses the range of loan products available for purchasing, refinancing, developing, or releasing equity from commercial and semi-commercial property. Unlike residential mortgages, commercial property lending is assessed on a combination of the property's income, tenant quality, lease terms, and the borrower's financial position.

The two primary products are commercial mortgages (long-term finance for stabilised, income-producing properties) and commercial property development finance (short-term facilities for building or converting commercial property). As whole-of-market brokers, we source both products from our panel of 100+ lenders, finding the most competitive terms for your specific property type and circumstances.

Commercial property finance is suitable for a wide range of property types including offices, retail units, industrial warehouses, logistics facilities, mixed-use buildings, and semi-commercial properties such as a shop with a residential flat above. We also arrange development finance for ground-up commercial new builds and commercial-to-residential conversion projects.

A commercial mortgage provides long-term finance for purchasing or refinancing commercial property. Terms typically range from 3 to 25 years, with loan-to-value ratios of up to 75% depending on the property type, tenant strength, and lease terms. Interest rates start from around 5.5% per annum for the strongest applications.

Commercial mortgages fall into two categories. Owner-occupied facilities are for businesses purchasing their own premises to trade from. Investment commercial mortgages fund the purchase of property let to third-party tenants. Lender appetite and terms differ between the two. Investment properties with strong covenant tenants on long leases typically achieve better rates and higher leverage than owner-occupied lending.

Repayment structures include capital-and-interest (reducing the loan over the term), interest-only (with the capital repaid at term end from sale or refinance), or a combination of both. The right structure depends on your cash flow requirements and long-term strategy for the property.

For developers building new commercial property, commercial development finance provides staged funding similar to residential development loans. The loan covers land acquisition and construction costs, drawn down in stages against completed milestones verified by a monitoring surveyor.

Commercial development finance is available for a range of project types including industrial units, warehouses, office buildings, retail developments, student accommodation, and care homes. Lending criteria focus on the GDV of the completed scheme, the strength of pre-lets or pre-sales, and the developer's track record in delivering commercial projects.

The exit strategy for commercial development finance is typically either sale of the completed units or refinancing onto a long-term commercial mortgage once the building is let and income-producing. Having pre-let agreements in place significantly strengthens your development finance application and can unlock better rates and higher leverage.

Our lender panel provides finance for virtually every type of commercial property in the UK. Office acquisitions, whether single buildings or multi-let office parks, are funded by both mainstream banks and specialist commercial lenders. Retail and high-street properties, including shops, restaurants, and retail parks, are widely financed despite changing high-street dynamics.

Industrial and logistics property is currently one of the strongest sectors for commercial finance, with lenders competing aggressively to fund warehouses, distribution centres, and light industrial units due to the sector's strong rental growth and low vacancy rates. Mixed-use properties combining commercial and residential elements can be funded as either commercial or semi-commercial mortgages, depending on the balance between the two uses.

More specialist commercial property types such as care homes, hotels, and purpose-built student accommodation (PBSA) require lenders with specific sector expertise. We have relationships with specialist lenders in each of these sectors and can source competitive terms for non-standard commercial assets.

Commercial mortgage rates currently start from around 5.5% per annum for the strongest applications, with rates depending on the LTV, property type, tenant quality, lease length, and whether you choose a fixed or variable rate. Arrangement fees typically range from 0.5-1.5% of the loan amount, and you should also budget for a RICS commercial valuation (£2,000-£15,000 depending on property size and type) and legal fees.

Eligibility depends on the property's income coverage, your financial position, and the property type. Lenders typically require the rental income to cover at least 125-150% of the mortgage payment (the interest coverage ratio). For owner-occupied mortgages, the trading strength of your business is assessed alongside the property's value.

Both individuals and limited companies can apply for commercial mortgages. SPV structures are common for portfolio investors holding multiple commercial properties. We search our whole-of-market panel to find the best commercial mortgage rate for your specific deal, whether you are purchasing, refinancing, or releasing equity.

To apply for a commercial mortgage or commercial development finance, submit your requirements in our Deal Room. We will review your enquiry within 24 hours and search across our lender panel for the most competitive terms available for your property type and circumstances.

The typical timeline for a commercial mortgage is 6-10 weeks from application to completion, including valuation, credit approval, and legal processes. Straightforward deals with clean tenancy schedules and financials can sometimes complete faster. For development finance on commercial projects, timescales are similar to residential development, typically 4-8 weeks from application to first drawdown.

We provide whole-of-market broker advice, searching across mainstream banks, challenger banks, building societies, and specialist commercial lenders. Whether you need a development loan for a new-build commercial project or a long-term mortgage for an existing investment property, we find the right funding options and negotiate on your behalf.