Buy, refinance, bridge or release equity
Commercial mortgages and bridging finance
Finance to buy the premises you trade from, refinance an existing commercial mortgage, bridge a purchase, or release equity from property you already own.
Commercial Mortgages at a glance
- Amount
- £150,000 to £5,000,000
- Term
- 5 to 25 years for a commercial mortgage, or months rather than years for bridging finance
- Security
- A first or second legal charge over the property. A personal guarantee is standard.
- Time to funding
- Weeks, not days, for a commercial mortgage: the valuation and the legal work set the pace. Bridging finance is built to move faster.
- Typical use
- Buying your own premises, buying an investment property, refinancing an existing commercial mortgage, bridging a purchase, releasing equity to fund the business
- What you'll need
- Property details, any lease or tenancy schedule, accounts, your Companies House number and photo ID
What it is
What is a commercial mortgage?
A commercial mortgage is a loan secured by a legal charge over a non-residential property: a warehouse, a shop, a suite of offices, a nursery, a pub. Lenders assess it differently from a house. They look at the loan-to-value (LTV), at whether you occupy it (owner-occupied) or let it out (investment), at the strength and remaining length of any lease, and at whether the business can afford the repayment if the tenant leaves.
Bridging finance is the short-term version: a loan for months rather than years, used to buy quickly, to fund a refurbishment, or to bridge to a sale or a longer-term mortgage. It is faster and more expensive, and it needs a clear exit. Either can sit as a first charge, or as a second charge behind an existing mortgage where the first lender consents.
The deposit is bigger than on residential property, and the lender lends against the valuation, not the price you agreed. If you already own your premises, the equity in it is often the cheapest capital available to your business.
Worked example
A worked example
- A wholesaler buys the warehouse it has been leasing.
- Stamp Duty Land Tax (or Land and Buildings Transaction Tax in Scotland, Land Transaction Tax in Wales), legal fees, the valuation and lender fees all sit on top of the deposit. Your solicitor will confirm the figures.
- The comparison that matters is the repayment against the rent the business is already paying on the same building.
The valuation, not the purchase price, is what the LTV is calculated on, and the two are not always the same number.
Is this right for you?
Is a commercial mortgage right for you?
Good fit if…
- You have been renting your premises for years and would rather build equity.
- You have a meaningful deposit available in cash, plus purchase taxes and costs.
- The property has a real resale market: standard industrial, a high-street shop, an office suite.
- You need to move faster than a mortgage allows and have a clear exit, which is where bridging fits.
Probably not if…
- You need the money this week. A commercial mortgage is not a fast product.
- Your deposit is thin. Lower deposits push you into specialist lending at specialist pricing.
- The property is highly specialised with one likely buyer. Lenders lend against resale, not against your plans for it.
- You are looking at bridging finance with no clear exit. Bridging without a refinance or sale lined up is how short-term debt becomes expensive debt.
What it costs
What a commercial mortgage costs
Commercial property usually carries the lowest rate on this site and the highest upfront costs. Budget for both.
- Interest rate
- Rates are set by the lender for your deal, not by us, and depend on your trading, your credit file and the product. A commercial mortgage generally prices below unsecured lending. Owner-occupied usually prices better than investment, and bridging prices higher than a term mortgage, often quoted per month.
- Arrangement fee
- An arrangement fee is typically charged as a percentage of the loan and paid at completion, plus the valuation fee, which you pay whether the deal proceeds or not.
- Legal costs
- You pay your own solicitor and, in most cases, the lender's legal costs too. Bridging lenders may also charge an exit fee.
- Paying it out early
- Many commercial mortgages carry early repayment charges, especially on fixed rates. Ask which you are being offered and how the charge is calculated.
Bizzloans is a commercial finance broker, not a lender. The lender that funds your deal pays us a commission, which we disclose to you. You pay us nothing to compare.
Eligibility
Who can apply
- A UK business: limited company, LLP, partnership or sole trader
- Photo ID (passport or driving licence) for each director, partner or owner
- Bad credit considered
- Demonstrated ability to afford the loan, from trading income or rental income
- A property the lender's valuer can value and a lender could resell
Don’t meet these? Talk to us. We have lenders for most situations, and we’ll tell you straight if we don’t.
Contact usWhat you'll need
What you’ll need
No documents
To get a quote
- Nothing. The property type, the price or estimated value, the amount you need and your deposit is enough for indicative numbers.
- We will tell you the likely LTV range before you spend money on a valuation.
Once you pick a lender
To settle
- Property details: the purchase agreement, or title details if you are refinancing
- Any lease and tenancy schedule, if the property is let
- Recent filed accounts and tax computations, or bank statements and management accounts on a lighter-documentation case
- Your Companies House number, and photo ID and proof of address for each director and guarantor
- Details of any existing mortgage, if you are refinancing or taking a second charge
- A valuation, instructed by the lender and paid for by you
How it works
How it works
First
Structure and indicative terms
We work out the LTV the property is likely to support, which lenders have appetite for that property type, and what the deposit and costs actually add up to. You get indicative terms before you spend money on a valuation.
Next
Application and valuation
The application goes to the chosen lender, an agreement in principle is issued, then the valuation is instructed. The valuer's diary is often the bottleneck, and the valuation figure, not the purchase price, is what the final LTV is calculated on.
Last
Legals and completion
Formal offer, legal charge documents to your solicitor, conditions cleared, completion booked. Bridging runs the same steps on a shorter clock.
This vs the alternative
Commercial mortgage vs bridging finance
Same security, different job. The question is how long you need the money for and how you will repay it.
| Commercial mortgage | Bridging finance | |
|---|---|---|
| Term | Years. | Months. |
| Speed | Weeks, set by the valuation and legal work. | Built to move faster. |
| Rate | Lower, usually quoted per year. | Higher, often quoted per month. |
| Repayment | Monthly, capital and interest or interest only. | Often rolled up and repaid in one go at the end. |
| The catch | Bigger deposit, slower process, tighter valuations. | You need a clear exit: a sale or a refinance. |
We will quote both if both are available. If you are thinking of securing business borrowing against your home instead, talk that through with your accountant and family first.
First charge or second charge
A first charge lender is repaid first if the property is sold. A second charge sits behind an existing mortgage, which lets you raise money without refinancing the first loan.
- A second charge usually needs the first lender's consent.
- It is often quicker than remortgaging and avoids early repayment charges on the existing loan.
- It prices higher than a first charge, because the lender is second in line.
- What a lender will advance depends on the combined LTV across both charges.
How long completion really takes
A commercial mortgage is measured in weeks, not days. Here is the honest order of events so you can set realistic expectations with the seller.
- Application submitted, documents collected, indicative terms issued.
- Credit assessment and agreement in principle. The valuation is instructed once that is in.
- The valuer inspects and reports. This is where most deals lose time, and you cannot rush a valuer's diary.
- Conditions cleared, formal offer, legal charge documents to your solicitor, completion booked.
FAQ
Commercial Mortgages questions
What LTV can I get on commercial property?
How long does a commercial mortgage take?
What is bridging finance?
Can my pension buy commercial property?
Do I need to occupy the property?
Can I refinance an existing commercial mortgage?
What if the valuation comes in under the price?
Who pays for the valuation?
A person reads this, not a scoring engine
A named advisor takes your file to the lenders on the panel that fund your industry and your turnover, and tells you plainly when a commercial mortgage is the wrong answer and what to use instead.
Ready when you are
Compare Commercial Mortgages today
Comparing is free, you’re never locked in, and checking won’t affect your credit score. If we can’t help, we’ll tell you that too.
