Commercial Mortgages
What is a commercial mortgage?
A commercial mortgage is a loan used to purchase or refinance commercial property, with the property itself serving as security. The loan is typically repaid over a longer term than other types of business finance, often spanning 10, 15, or even 25 years.
The property can be used for various purposes, including:
Commercial mortgages are available to businesses of all sizes, from small enterprises purchasing their first commercial property to large corporations expanding their real estate portfolio.
How a commercial mortgage works
A commercial mortgage is structured much like a residential mortgage but is designed for businesses. The process typically follows these steps:
1
Initial assessment
We review your business financials, the property you want to purchase, and your funding requirements.
2
Lender matching
We approach our panel of commercial mortgage lenders to find the best deal based on your circumstances.
3
Application and approval
Once terms are agreed, the lender will assess the property’s value and your ability to repay the loan.
4
Loan completion
Funds are provided to purchase the property, and repayments begin according to the agreed schedule.
5
Ongoing repayments
Monthly repayments typically include both interest and capital, with the loan term ranging from 10–25 years.
The terms, interest rates, and fees will vary depending on the property type, the loan size, and the business’s financial standing.
Key benefits of commercial mortgages
Commercial mortgages offer several advantages for businesses looking to invest in property:
- Long-term finance: Commercial mortgages usually have longer terms (10–25 years), making monthly repayments more manageable.
- Competitive interest rates: As a secured loan, commercial mortgages often come with competitive interest rates compared to unsecured borrowing options.
- Property ownership: With a commercial mortgage, you own the property outright once the loan is repaid. This can provide long-term asset growth and stability for your business.
- Cash flow flexibility: A commercial mortgage allows you to invest in property without having to deplete working capital or use other business assets as security.
- Potential for property appreciation: Owning commercial property can offer long-term capital growth if property values rise over time.
Who is a commercial mortgage suitable for?
Commercial mortgages are commonly used by businesses that need to purchase or refinance commercial property, including:
- Start-ups: Businesses that want to purchase property for their first premises or retail space.
- SMEs: Established small businesses looking to expand or relocate to a larger property.
- Property investors: Companies or individuals investing in commercial property for rental income or capital appreciation.
- Large businesses: Corporations with larger property portfolios, seeking to refinance for operational flexibility.
Whether you are a first-time buyer or an experienced property investor, a commercial mortgage can provide the funding you need to acquire or refinance your business property.
Why choose Bothwick Finance for your commercial mortgage?
Arranging a commercial mortgage can be complex, but with Bothwick Finance, you’ll have access to experienced advisors who guide you through every step of the process.
When you work with us, you benefit from:
1
Access to multiple lenders
We work with a broad panel of commercial mortgage providers to ensure you get the best rates and terms.
1
Tailored advice
Our team takes the time to understand your specific needs, providing bespoke recommendations based on your business and property.
1
Support through the application process
From initial enquiry to loan completion, we help ensure the process is as smooth and efficient as possible.
1
Clear, transparent advice
We explain the terms, interest rates, and potential risks clearly, so you can make informed decisions.
1
Ongoing support
We are here to assist you throughout the loan term, helping you manage repayments or even remortgage when appropriate.
Frequently asked questions
Commercial mortgage FAQs
What types of property can be financed with a commercial mortgage?
A commercial mortgage can be used to finance a wide range of property types, including offices, retail spaces, industrial units, warehouses, and mixed-use properties.
How much can I borrow with a commercial mortgage?
The amount you can borrow depends on several factors, including the property value, your business’s financial standing, and the loan-to-value ratio (LTV). Typically, lenders will offer up to 70–80% LTV for commercial property.
Do I need a deposit?
What is the interest rate on a commercial mortgage?
Interest rates depend on the lender, loan size, term length, and the business’s financial health. We’ll help you secure the best rates possible for your situation.
Can I use a commercial mortgage to purchase land?
Yes, land purchases can be financed using a commercial mortgage, provided the land is suitable for development or other business use.
Request a quote
If you are considering purchasing or refinancing commercial property for your business, we can help you structure the most suitable commercial mortgage for your needs.
Request a quote today and speak to one of our account managers about how a commercial mortgage could support your business growth.
Yes, commercial mortgages typically require a deposit of at least 20–30% of the property’s value, although this can vary based on the property type and lender.