If the vendor has taken the decision to Opt To Tax and you are running a VAT registered business, you may be able to reclaim the VAT – but you should discuss this with an expert advisor.
Commercial Property Finance: Buying premises for your business or investment
Buying premises for your business or investmentSpeak to one of our experts020 4525 5312
Large scale borrowing
- Terms up to 20 years
- £50,000 – No Maximum
- Rates from 2% over base rate
- Individual arrangements tailored to your circumstances
Designed around your needs
- Repayments geared to your turnover
- Adverse Credit – no problem
- No Income Proof Required
- Repayment and interest only available
- Refinance existing property
- Up to 80% Loan to Value available
- Purchase land, premises or investment property
- Commercial, Residential and Land
Talk to Rangewell – the business finance experts
The right property finance can be the key to a profitable business. We know every property lender in the market and use our contacts to help you find the deal that's right for you.
At Rangewell we recognise your professional status, and we work harder to find you better solutions - which can include 100% finance for many of your needs.
Commercial Property Finance
Buying premises for your business or investment
If you're thinking about buying your business premises or buying for investment - Rangewell can help you find the commercial property finance deal that's right for you
Our commercial mortgage product can be used to invest in new properties or portfolios. Buying the right commercial property can provide premises for your business, which can reduce your outgoings and create a valuable additional asset for your business.
The team at Rangewell know that the commercial space can be complicated. This is why we know it’s essential to provide flexibility and clarity for decision making. Our team of experts will help find a deal that is right for you to ensure a smooth and straightforward journey.
What is commercial property finance?
Commercial property finance allows you to borrow what you need by securing a loan against a residential property, a commercial property, or a property portfolio.
Property development finance is usually in the form of a short-term loan that can be used for the development of a new building project, or refurbishment of an existing property.
Lenders may advance up to 70% of the gross development value, and terms can be up to 24 months.
What are the different types of commercial property finance?
Commercial property finance comes in many different types, and sometimes it can be challenging to know what’s right for you. Here are some examples of various commercial property finance products available on the market.
Commercial mortgages are available for all different kinds of businesses, from sole traders to limited companies. Usually, lenders will fund up to 75% of the purchase costs over a 30-year term. They’ll usually secure a mortgage against a first charge, and the affordability is generally based on the profitability of your business and your ability to make the monthly repayments.
Property Development Finance
Property development finance is a short-term loan used to develop a new building or refurbish an existing space. Lenders will usually look to advance up to 70% of the gross development value, and terms are generally up to 24 months.
Bridging Finance is a short-term finance solution usually used by an experienced property developer and investors, which provides a quick way to finance the purchase of a property. The lender will take the first charge on your property and seek an exit once the loan has come to term.
Auction Finance is a way of arranging funding in advance of an auction. It can help you know how much you can bid on a particular property. Find out more about auction finance here.
Commercial property solutions from Rangewell commercial property involve high costs. Therefore, it is vital to have expert help to get the kind of funding that will help you reduce your outgoings. Speak to Rangewell today for more information.
Buying property with a commercial mortgage
A commercial mortgage is one of the most common forms of finance used to buy a commercial property. These operate much like a residential mortgage, with a large loan secured on the property itself.
Generally, commercial mortgages are for 15 years or more, and, as with a residential mortgage, the premises will be at risk if you cannot keep up your repayments. However, unlike a residential mortgage, the rates for a commercial mortgage are arranged on an individual basis.
Lenders will look at your business, accounts, and projections to ensure that it has a future and set interest rates based on the level of risk they believe it presents.
There will be valuation, arrangement and legal fees to consider. There can also be additional costs associated with a Commercial Mortgage for the services of professional advisors.
This is a long term business loan usually offered to property investors who already have some rental properties. The lender can consolidate their borrowing into one loan.
This can be a little more complex. It’s a hybrid type of finance that combines elections of debt financing and equity investment secured against the property. This type of finance usually allows property developers to reduce their cash flow requirements.
How much can you borrow?
Because of the legal and administrative costs, it is uneconomic to borrow less than £50,000 with a commercial mortgage, and some lenders have a minimum of £75,000 or more, but there is no set upper limit.
Typical loan-to-value ratios for a new business with no trading history will be a maximum of 50% of the purchase price. However, owner-occupied businesses such as offices or shops can typically get a maximum loan-to-value of around 80%.
What can commercial mortgages be used for?
Commercial Mortgages can be used for three purposes:
Commercial mortgages for owner-occupiers allow a company to purchase the premises to buy new premises to move into.
Commercial mortgages can be used to fund the purchase of residential property to be let out. This approach is commonly used by professional landlords and buy to let limited companies to help build a commercial property portfolio.
Commercial Mortgages can also fund commercial buy to lets, so you could, for example, buy a warehouse and let it out to another business.
Repaying the mortgage
Commercial mortgage deals are either fixed-rate or variable rates. Fixed-rate deals are usually between two and five years. On the other hand, taking a variable rate mortgage will allow you to benefit from any reductions in the base rate, but will also mean repayments may increase if the base rate increases.
You may also be able to choose a repayment mortgage option where you pay the capital and interest back each month or an interest-only mortgage, where you only pay the interest back each month. If you choose this option, the lender will seek evidence of an appropriate investment policy that will cover the outstanding capital at the end of the loan term.
What are the benefits of commercial property finance?
There are many benefits to a commercial mortgage for investment property, but here are just a few ways you can use this type of lending to develop your business:
- Develop existing property
- Develop new property
- Extend current commercial premises
- Residential developments and projects
- Commercial developments and projects
- Buy land
To find out more about the benefits of commercial property finance, speak to our experts at Rangewell.
When is a business eligible for commercial property finance?
Commercial lenders generally prefer their borrowers to have some commercial property investment experience as operating mixed-use or commercial properties require a greater level of understanding.
To increase your chances of being approved for business finance, you'll need to qualify for the following eligibility criteria :
- Have a deposit of around 20% - 30%
- Be a homeowner
- Have owned a few buy-to-let properties for a minimum of approximately 24 months
- Have savings in the bank
- Provide evidence of your income whether you receive a salary, are self-employed, or rent.
If you don't hit all of the criteria above, don't worry! There are still options out there. Speak to Rangewell. We work with some of the best commercial mortgage providers on the market, and we'll be able to source the right deal for your needs.
Why get commercial finance from Rangewell?
Our team are business finance specialists and we work with the latest technology to ensure we're providing the best service possible,
We are committed to being:
Independent - We are fully transparent and completely independent. We give businesses looking for finance the full facts in a clear and simple manner - putting them in control.
Impartial - We treat all lenders equally, ensuring you always know all the facts about all the deals.
In-depth - We have comprehensively mapped over 300 business finance providers and 23,000 business finance products providing expertise that is unavailable elsewhere.
In-person - Specialist Finance Experts support every transaction every step of the way.
For commercial property advice, speak to Ranagewell today.
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Discover our range of finances
Every type of finance for every type of business
Our goal is very simple - to help businesses find the right type of finance as quickly, transparently and painlessly as possible.
Helping you build your profits
Buy a property for your businessCommercial mortgages can you buy your current business premises, or new premises to move into – and secure a valuable asset.
Buy an investment propertyCommercial mortgages can help you purchase a property to be let out – helping professional landlords and buy-to-let companies to build up a property portfolio.
Buy at auctionBuying a commercial property at auction depends on having access to a large reserve of cash. Auction finance is designed to help.
Short-term and long-term fundingMany deals are based on short-term finance with a bridging loan to allow them to be progressed fast - and then refinanced with a commercial mortgage to reduce costs for the long-term.
Build a property portfolioCommercial mortgages can be the simple way to build a property portfolio, for residential or commercial buy to let or for development.
Gain an appreciating asset for your businessBuying your own premises can be a valuable asset for your business which could offer the prospect of capital growth.
Download Rangewell’s free and detailed guide to Commercial Property Finance
What types of funding are available for commercial property?
How do commercial mortgages differ from residential mortgages
How can refinance free up funds?
What are the costs?
What are the restrictions?
The downsides and how to avoid them
Paperwork you need to provide with your application
Key terms to check
Can refinancing a commercial mortgage help businesses with cash flow?
Do all lenders have to be authorised and regulated by the Financial Conduct Authority?
Is a bridging loan classed as short term business finance?
Must my business have a registered office in England/be registered in England to qualify for a business mortgage?
What interest rate can I expect with property development finance?
What about commercial owner-occupied/residential mortgages or buy to let mortgages?
Am I able to refinance an existing commercial mortgage?
Download this free resource on financing a commercial property
Download your Rangewell Business e-Book
Available in ePub, mobi and .pdf format
Frequently asked questions
Have a question?
As a general rule, selling of commercial property is exempt from VAT, which means you do not have to pay VAT on the purchase price - unless the vendor has taken the decision to Opt To Tax.
A commercial property solicitor will take care of all aspects of the legal side of a property sale or purchase, to ensure that you have full title and the vendor recieves payment.
Question Not Answered?
Our finance experts are waiting to answer questions and discuss your finance options. Get in touch with us and we'll be happy to help.