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What is a Commercial Property?

Published on 19th December 2018 - Last update on 10th January 2019

Commercial property represents an opportunity for British business owners, giving them the opportunity to expand their operations and penetrate unexplored markets. Regardless of whether you operate in retail, catering, warehousing, technology or construction, commercial property offers a distinct advantage that needs to be seized upon. But in order to do so and take the next step in your development, overcoming the cost barrier is an absolute must - but how? Rather than make a large dent in your finances to support an upfront purchase, there is a more cost-effective solution - Commercial Property Finance. Granting access to a variety of business finance solutions, Commercial Property Finance gives you the means to purchase any type of business premises across either a short- or long-term duration. So what exactly is commercial property and why is it so sought after?

What is commercial property?

Commercial property covers a wide range of forms and generally describes land or property which is used to generate an income through either the sale of good and/or services, rent or capital gains (investment). As such, commercial property could be suitable for any type of UK business, no matter your sector. Whether it’s office buildings, industrial units, a shopping centre, restaurant, shopping frontages, farm land or HMOs, the next question to ask yourself is ‘What’s in it for me?’

Thinking about purchasing commercial property for your business? Need help supporting the purchase? Apply for Commercial Property Finance and learn more about how your business could benefit.

Why should I purchase commercial property for my business?

Despite the expense involved, many UK businesses still compete for the ability to purchase commercial property in the local area - and for good reason. Commercial property offers a number of distinct advantages, ensuring the viability of your business, yet in order to help make an informed decision, here are just some the benefits:

  1. The basis for a steady income - By deciding to own a commercial property you can choose to rent either a section or the whole property to either another business or household (depending on the type of property). As such, you are able to maintain a steady income through the collection of rental payments each month.

  2. More control and flexibility - Owning commercial property as opposed to leasing a workspace gives you more control over how your business operates, not to mention the savings. Plus, you can make changes to the property and adapt it to your own needs and personal tastes without having to ask anyone else, with the exception of planning consent - if you want to alter its structure or if it’s grade listed you will still require planning permission for this. In addition, owning the premises also gives you the freedom to change to how much of the property is being let - if you intend to do so. So you can potentially increase the number of tenants you are accommodating to raise your rental income or, alternatively, decrease the number of tenants to expand your operational capacity. It’s entirely up to you.

  3. Appreciation - The property market has been consistently experiencing a year-on-year increase in value so, unlike other assets such as equipment and vehicles which generally depreciate over time, a property is a great way of making a return on your investment should you decide to eventually sell up.

  4. Favourable tax treatment - By purchasing commercial property for your business you might be entitled to a number of tax benefits as well. This could include reclamation of interest, amortisation expenses, and services costs on a quarterly basis. Plus, there may be other tax benefits available to you, but it is important to discuss these with, and get the appropriate advice from your accountant or advisor.

  5. Prestige - Commercial property is a highly sought-after commodity and by deciding to own instead of lease, it shows customers, agencies and investors that your business is reliable. As such, it may help you to entice customers and/or draw more contracts. Plus, owning commercial property could make it easier for you to gain finance since you might be able to borrow capital against it.

How can I finance a commercial property purchase?

There are plenty of commercial properties for sale all across the UK. Yet in order to benefit, you need the capital - which is a pitfall for all too many business owners. But rather than rely on your own savings, you could spread out the expense using Commercial Property Finance. Depending on how you intend to use the property in question, you could be eligible for either a Commercial Mortgage, Buy-to-Let Mortgage or a Bridging Loan. However, with each of these products working in different ways to support the costs of purchasing property, speaking with a qualified business finance professional could prove invaluable to you and your business.

Thinking about purchasing a commercial property?

Purchasing a commercial property is a major decision, and one that shouldn’t be taken lightly.

But if this is the course you intend to follow, you need to make sure that you’re fully prepared in advance. One of the greatest challenges of acquiring property for your business is the expense. Bu,t rather than allow it to delay your plans or cancel them entirely, you could explore what the Alternative Finance industry has to offer. Yet with so many different products and lenders to choose from, how can you be certain you’re making a suitable decision for your business’ future?

At Rangewell, we’re an Access to Finance specialist and have mapped over 400 lenders to offer you an overview of more than 23,000 business finance products so you don't have to. Our services are free to use and we’ll also guide you through the application process through to drawdown. So if you’re planning on purchasing commercial property but need access to more capital, apply for Commercial Property Finance today or find out more with Rangewell.


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David Harrison

David Harrison

Content writer
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