A Commercial Mortgage is a  type of borrowing related to financing commercial property. Commercial mortgages can be arranged for financing the purchase or re-mortgaging of a property that is primarily for commercial or business use. A commercial mortgage can be arranged for a trading business to trade from, or alternatively as a form of investment such as a commercial buy to let mortgage.

Learn more about Commercial Property Finance

You may be considering purchasing a commercial property, for example, offices, retail, or warehouses. Or perhaps you want to check the suitability of a commercial mortgage for the purchase of a semi-commercial property, for example, a shop with residential accommodation above, or a house with a commercial unit attached. In this video, Mark Johnston answers some of the questions clients have about commercial mortgages. If you have any more questions book a free consultation to talk privately with Mark.

What is a Commercial Mortgage?

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What is a Commercial Mortgage?

Commercial mortgages are a term for any loan secured on property that is not your primary residence. Business mortgages are structured as a term mortgage secured against commercial property or semi-commercial property. Commercial Buy to let mortgages are a particular type of high-volume commercial mortgage packaged for a volume market to support the development of a property portfolio.

A commercial mortgage usually lasts from 3 to 30 years. There are no set rates, and this means that every application is reviewed as lenders investigate the risk levels and suitability of applicants. Deposits for a business mortgage can be substantial, but you may be able to find a suitable offer from our panel of lenders with a 70-75% mortgage.

Loan to value (LTV) measures the loan-to-value ratio to calculate how much you are borrowing in relation to how much the property is worth. Johnston Financial Solutions can help you determine the most appropriate loan to value ratio (LTV) based on an assessment of affordability. If it is an investment property, then the amount you can borrow will be determined by the rental income generated by the investment. LTV typically will not exceed 65% of the purchase price of the asset. Book a meeting with Mark to find out about how commercial property finance might work for your business

Business benefits associated with a Commercial Property Investment

There are many commercial reasons your business might want to consider taking out a commercial mortgage. Here are a few to consider:

  • A commercial mortgage is often used to buy premises for an existing business, providing added stability to an organisation.
  • As a commercial property owner, you will ultimately have control over any changes to your business premises.
  • The interest on commercial mortgages is tax-deductible.
  • Substantial capital gains can be realised with the purchase of a commercial property.
  • Property is often considered a sound investment as property values tend to increase over time.
  • Investing in commercial property can help you diversify and may reduce business risk.
  • Commercial property can generate additional rental income from an office or retail space.
  • Solid retirement planning. Holding commercial property investment in a pension fund has long been a favourite investment strategy of business owners.

When considering commercial property investment it is important to note that individual circumstances differ. Best practice recommends that you should obtain specialist guidance from a Financial Adviser when considering any significant investment.

Commercial Mortgage: To find out more about arranging a credit facility to buy business premises, an investment property or buying land, please get in touch. We can arrange a FREE consultation to discuss how a commercial mortgage can help you and your business—Book A Meeting with Mark.

Client Testimonial: ‘It was daunting to be borrowing such a large amount of money for the first time, and having Mark on board as an independent finance broker reassured us that the business could afford the loan. The management team is happy to recommend Johnston Financial Solutions.’ Angela Mc Donald Moving On Up Limavady

How to apply for a commercial mortgage

Engaging with a specialist independent broker like Johnston Financial Solutions will take the stress out of the application process. Our lead broker Mark Johnston will ensure you have all the information available to you so that you can choose the most suitable lender. Our clients have recommended us because we make the application process more manageable.

How long does the application take to get an offer for a Commercial Property Loan?

Once we have received your enquiry and any required documents, we will typically get our clients an indicative quote within 48hours. The commercial loan will generally complete 6 to 8 weeks later.

What do I need to support my application for a Commercial Mortgage?

We recommend that you collate the following documents ahead of time in support of your application. Preparing these documents will allow you to move quickly on new property investment and help ensure your application is processed efficiently:

  • Bank statements for the last six months
  • Three Years Business Accounts
  • Statement of Assets Liabilities, Income and Expenditure
  • Schedule of Existing Property Portfolio
  • Proof of identity and address
  • Lease and tenancy agreements

What else should you consider before you choose a mortgage product?
Commercial Property investment is not without its risks. As with every investment, valuations of commercial property can go up as well as down. Commercial property value is influenced by many factors, particularly the supply and demand of property and general economic stability.

How can we help?
Our consultation service will help you carefully consider which mortgage product is best for you and your business. Talk to Us About a Commercial Mortgage. With our independent expert guidance finding commercial funding has never been simpler. Book a meeting with Mark