Does your business trade from premises? A commercial mortgage is key to those premises being an asset of your organisation not a liability.
Commercial mortgage – a mortgage for your business.
What is a commercial mortgage?
A commercial mortgage is a mortgage (loan) which is secured on any property which is not your main residence.
For business finance purposes here we’re looking at business mortgages – so commercial mortgages against business premises which are owned and operated by the your business.
So – your commercial mortgage is to purchase or finance the property your business trades from.
If you’ve landed here looking for a buy to let mortgage, commercial buy to let mortgage or other property finance, we have specific property finance pages here.
Learn more about commercial mortgages
We’ve been arranging funding since 1997 and, if you’ll forgive us for boasting but we think we’re quite good at it!
In fact – 7 x UK Best Broker Awards back us up in that assertion, so does our 5 star customer feedback.
So -for your business mortgage needs, or anything else funding – make sure you use a broker you can trust.
What can I use a Commercial Mortgage for?
Whenever you need to buy a building for your business to trade from or release capital from your existing property – A commercial mortgage could be the answer.
Examples of some uses of commercial mortgages are;
- Buying a trading business (most commonly retail, hospitality, pubs, care sector or small manufacturing)
- Purchasing premises for your business to trade from (As well as the above could also include service businesses, larger manufacture, warehousing and distribution – in fact any business which needs space to operate.)
- Refinance of existing debts to release capital or reschedule the repayments (Consolidate other debts, reduce interest rates or regular payments.)
- Raise finance for a refurbishment or to purchase other assets or property.
In fact – so long as it’s legal you can probably raise funds to do it!
Reading this when you’ve already been told you don’t qualify for a business mortgage? Read more about how Acorn.finance have been successfully funding “impossible” cases for 25 years!
Alternatives to a Commercial Mortgage
In terms of the interest rate and repayment profile the mortgage is generally the best option for financing property.
Of course there are situations when a business mortgage won’t be available – you can see the general requirements for a successful mortgage application below.
If a Commercial Mortgage is not currently available for some reason then a bridging loan or business loan could be a good alternative, contact our specialists for more help.
How to get a commercial mortgage
The general requirements for a successful commercial mortgage application are straightforward and similar across all lenders;
- Who is the applicant?
- What are the funds for?
- How will the funds be repaid?
Different lenders will set different height “bars” for each of the three requirements. For instance some lenders might require significant business experience or set a high debt servicing cover requirement (DSCR – profit compared to mortgage payments.)
For more information on how to get a commercial mortgage click here. (Coming soon)
Bridging loans for businesses
There is a variety of circumstances which could make a business mortgage unavailable, these might be around the applicant, the business or around the property.
Bridging finance can be used to meet a number of these areas;
- Property improvements.
- Starting up a business in the property.
- Business development.
- Short term funding needs for other reasons.
A more flexible alternative to a commercial mortgage, especially a remortgage could be a business loan. The requirements for a business loan might be less stringent, especially around the property.
Because the repayment term of a business loan (especially an unsecured loan) will be much shorter – the repayments will be much higher, even for a smaller amount (Using our commercial mortgage calculator compare a 25 year term to a 5 year term and see the difference in repayments.)
Here at Acorn.finance we’ve seen many cases over the years which have been deemed as “impossible” by the high street banks, so called “common knowledge” or even by other brokers.
We’ve turned those cases around and now hundreds of business owners are in the situation where they own their premises rather than rent.
- Sitting tenants have been funded at up to 100% of the purchase price of the premises they trade from.
- Means to purchase a non-trading business or other situations without any accounts.
- Exercising lease options
- Bad credit business mortgages
Contact us now on 0808 164 2364
Acorn.finance – 4th Floor, Silverstream House, London. W1T 6EB