Commercial Mortgages
Finance for commercial property — whether you're buying premises for your business or investing in property to let.
Commercial mortgages can be used to purchase, refinance or release equity from offices, retail units, industrial buildings, mixed-use property and other commercial premises.
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Commercial property finance built around the transaction.
The way a lender assesses a commercial mortgage depends heavily on how the property will be used, who will occupy it and how the borrowing will ultimately be supported.
Commercial property is financed differently depending on how it will be used.
A commercial mortgage is a loan secured against property used for business purposes rather than as a private home.
The borrowing can be used to buy a new property, refinance an existing facility or release equity from commercial premises already owned.
One of the first distinctions a lender will make is whether the property will be occupied by your own business or held as an investment and let to third-party tenants.
Owner occupied or commercial investment?
The property may look similar, but the way lenders assess the mortgage can be very different.
Owner Occupied Commercial
For a business purchasing or refinancing the premises from which it trades.
Buy the premises your business currently rents.
Purchase larger or additional premises as the business expands.
Refinance property already owned by the business.
Release equity from commercial property for other purposes.
Commercial Investment
For commercial property purchased or held primarily to generate rental income.
Purchase a commercial property with an existing tenant.
Acquire a property to let to third-party businesses.
Refinance an existing commercial investment.
Expand an existing commercial property portfolio.
Commercial property comes in many forms
Funding can be considered across a wide range of commercial property types, subject to the individual property, borrower and proposed use.
Mixed Use
Buildings combining commercial and residential accommodation.
Offices
From individual office premises to larger multi-let office buildings.
Industrial
Warehouses, distribution centres and manufacturing premises.
Retail
Shops and premises occupied by retail or service-based businesses.
Care & Healthcare
Care homes, clinics and other specialist healthcare premises.
Specialist Property
Other commercial premises can also be considered depending on their use.
What will a commercial mortgage lender look at?
Commercial lending is assessed around the complete transaction rather than simply the property value.
The Property
Type, condition, location, value and proposed use of the premises.
Loan-to-Value
The proposed borrowing relative to the value or purchase price.
Business Performance
For owner-occupied property, lenders will want to understand the trading business supporting the borrowing.
Rental Income
For investment property, the rent produced by the asset is a key consideration.
The Lease
Tenant quality, lease length and other tenancy terms may affect investment lending.
Borrower Experience
The background and financial position of the borrower can also influence the application.
What are you looking to do?
Commercial mortgages are not limited to purchasing new property. Existing commercial property can also form part of a refinancing strategy.
Purchase
Finance the acquisition of a commercial property for your own business or as an investment.
Buying Commercial PropertyRefinance
Replace an existing mortgage or review the structure of borrowing secured against commercial property.
Existing Property FinanceRelease Equity
Raise capital against commercial property already owned where an appropriate lending structure exists.
Capital RaisingHow a commercial mortgage progresses
Commercial transactions vary, but the process will normally move through a number of familiar stages.
Understand the Transaction
Property, purchase price, funding requirement and proposed use.
Review the Lending Options
Consider the borrower, property, loan structure and suitable lenders.
Application & Valuation
Submit the application and progress property valuation and underwriting.
Legal Work & Completion
Complete the lender's legal requirements before funds are released.
Two different lending conversations
The distinction between owner-occupied and investment property affects what evidence is most important to the lender.
Can the business support the borrowing?
Trading performance Business accounts and ongoing financial performance.
Affordability The ability of the business to service mortgage payments.
Property use How the premises support the business's operations.
Deposit / equity The borrower's contribution to the transaction.
Does the property support the borrowing?
Rental income Income generated by the commercial lease.
Tenant The strength and profile of the occupying business.
Lease Remaining term and structure of the tenancy.
Yield & LTV Relationship between value, rent and proposed debt.
The borrower does not always have to be an individual
Commercial property can be held through different ownership structures depending on the circumstances of the transaction.
Have a commercial property in mind?
Tell us about the property, what you're looking to do and how much funding you require.
Speak to an Advisor
Have a funding requirement you’d like to discuss? Speak directly with one of our commercial finance advisors.
We aim to respond to enquiries
within 2 working hours.
Book a quick, no-obligation consultation with one of our commercial finance specialists — we’ll help you find the most suitable solution for your business.