Commercial Mortgages

Whether you are a business owner looking to create wealth through increasing your assets, tired of paying rent and want to take control of where you work or want to invest in a commercial premises to let, we have you covered.

Commercial Mortgages

What is a Commercial Mortgage?

    There are two different types of commercial mortgage: commercial finance for a trading business is a commercial loan to buy premises for your business, which you will trade from. A commercial mortgage for investment is a mortgage to purchase a commercial property, where the owner plans to hold it and rent it as an asset. This is very similar to a residential buy-to-let, but usually covers commercial property for pubs, restaurants, offices, yards or even outbuildings.

    Commercial Mortgage for Trading Business

    Commercial Mortgage for Investment

    Commercial Mortgages for Trading Business

    ANSWERS

    How does a Commercial Mortgage for trading business work?

    If you are currently running your business from premises which you rent, a commercial mortgage could help you to buy your premises. Most trading business owners decide to purchase their premises through a separate holding company or a special purpose vehicle (SPV), which mitigates the risk to your investment and business. There may be tax benefits if you purchase in this way, but you should always consult a tax advisor first. 

    Commercial mortgages are usually offered on a capital repayment basis and you will require a deposit, typically it is a minimum of 25% but it can be up to 35% of the purchase price.

    A commercial mortgage is always based on:

    • Your company accounts
    • Affordability based on the company’s net profit

    • Serviceability of the debt.

    Often lenders ask for the following security;

    • Debenture over the trading business
    • Personal guarantees from shareholders/directors
    • First legal charge over the property (this is exactly the same for a residential mortgage)

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    Who is a commercial mortgage for?

    A commercial mortgage can be applied for by any trading business, which has a minimum of two years’ trading. Most lenders will ask for six months’ personal (for all applicants) and business bank statements and two years’ trading accounts. Lenders will require an ALIE (assets liabilities, income & expenditure).

    What trading company commercial mortgages are available?

    There are many options available across variable and fixed rates and capital repayment is usually the repayment method although some smaller niche banks offer interest only or a combination of the two. Some lenders may offer a product with no early repayment charge, providing you with greater flexibility.

    Commercial Mortgages for Investment

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    How does a Commercial Mortgage for investment work?

    A commercial mortgage for investment, much like a residential buy-to-let mortgage, will be granted based on the rental income that the property or asset can produce. Most lenders will not exceed a 75% loan to value (LTV). There are many mortgages available for commercial or mixed use (commercial and residential). It is also possible for there to be two different usage classes on one title.

    There are options to take a commercial mortgage for investment in your personal name or alternatively through a special purchase vehicle (SPV).

    Who is a commercial mortgage for investment for?

    Anyone can invest in and apply for a commercial mortgage. However, when investing in commercial property, it usually helps to have some experience with buy-to-let properties as some lenders prefer to lend to people with a proven track record. 

    What investment commercial mortgages are available?

    Similar to residential buy-to-let mortgages, it is common practice to borrow on an interest-only basis, however capital repayment is an option.  There are various fixed and variable rate products available.

    “I have been working with NM Finance (specifically Max and Ben) for a number of years now and I could not rate their service higher. From beginning to end they are there every step of the way. From simple remortgages to more complex limited company products they have you covered! Top notch service!”

    Why use us for your commercial mortgage?

    More choice: the best mortgage rate for you

    We know that we get the best possible results for our customers time and again, because we are a ‘Whole of Market’ mortgage broker. Based on your individual situation we will find the right mortgage or finance for you.

    You can have full control of your finances, because we are in full control of our business

    We are a directly authorised mortgage broker, regulated by the FCA (Financial Conduct Authority), which means that we can run our business independently, in a way that is tailored to your needs. 

    Holding your hand at every step (if that's what you need, of course)

    We will walk through every stage of the mortgage process with you, ensuring that you know what’s coming next. No nasty surprises and a robust process that you can rely on. 

    Get in Touch and Tell Us Your Plans

    New Mortgage Finance is a whole of market specialist  mortgage broker, with over 20 years experience. We are not restricted to a panel of lenders and can search the whole of market for you, to ensure you get the best deal.

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