Commercial Mortgages

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What is a Commercial Mortgage?

A commercial mortgage is funding for a premises that a business operates from including:

Office Buildings

Nursing Homes

Hotels

Warehouses

Nursery Schools

Guest Houses

Shopping Centres

Dentists

Caravan parks

Shops

Vets

Agricultural Land

Care Homes

Pharmacies

Funeral Parlours

Structure

This type of funding is for businesses that want to buy a property that they will operate from. It is different to a commercial investment mortgage which relies on tenant income.

Mortgages are a long term loan, typically structured so that it is repaid (amortised) over 15 years or longer. The security the lender will require will be a legal charge over the property, however many lenders also require a debenture.

Some lenders have maximum loan periods, for instance 5 years, therefore the loan will not be fully repaid and you will need a new loan when it expires.

All lenders have maximum Loan To Value (LTV) policies which mean you can borrow up to a certain percentage of the property value. A typical LTV maximum is between 65% and 75%.

Pricing

Loans of this type are typically priced as a lender margin over the Bank of England Base rate (often just called “the base rate”) or over LIBOR.

Margins charged by lenders are typically from 2.5% upwards. There is usually an arrangement fee of 1% of the loan value upwards. Some lenders charge early repayment fees. Lenders offer both variable and fixed rates.

Other Costs

A professional valuation (PV) will be required, this will be instructed by the lender, normally at the borrower’s cost. Most lenders require you to have a solicitor to complete the legal work, if you are buying a property then the same solicitor can respond to the bank’s requests. We can help you find a solicitor if you require. Property purchases are usually subject to Stamp Duty or VAT, which can potentially be funded as part of your funding requirements.

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Steve Carter

Nathan Foster / Funding Friends

We worked with Nathan Foster on a complex refinancing deal. He worked tirelessly to deliver a solution, staying positive despite all the bumps in the road, and we ultimately achieved a very successful outcome. I would happily recommend Nathan and Funding Friends to others.

Ross McDonald

Expert Advice and Support from Andrew Robertson

Andrew Robertson was a source of constant support in this process. Always willing to help and advise, he was at the end of a call or email for what seemed 24/7 during this our funding application. Knowledgeable, diligent and thoughtful, he helped facilitate achieving our funding goals and helped us persevere through some tougher challenges. I would highly recommend him and Funding Friends.

Victoria Sylvester

Lisa Walls-Hester was amazing

Lisa Walls-Hester was amazing. Really supportive and clear, and helped a lot to keep everything moving along. Her credible relationships with lenders and knowledge really helped us to find the right lender to work with.

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Funding Friends is a trading style of Funding Friends Ltd, registered in England No. 12693505

Funding Friends Ltd is authorised and regulated by the FCA No. 935775

Funding Friends is a member of the NACFB registration number 28750

Funding Friends operates as a commercial finance broker and is not a lender. Any finance or products arranged through Funding Friends is entered into entirely at your choice and is at your risk, and you are advised to consult qualified professionals outside of Funding Friends to make the right decision for your needs and circumstances. Your property or other assets may be repossessed if you do not keep up repayments on any debt secured against it. Funding Friends may receive a commission or finder’s fee for effecting introductions to lenders or third parties.