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Working with Rangewell will give you access to the whole of market, including specialist commercial mortgage lenders. Work with our team to explore the options that suit you.
When buying property for your business, a good commercial mortgage can make or break your project. Finding the right lender, who can offer you a product that works for you on favourable terms, can be difficult. Thankfully, Rangewell can help you find the commercial provider that can support you to achieve your business goals.
So, whether this is your first commercial property purchase, or you are looking to remortgage an existing portfolio, let Rangewell help find the right product for your business. We're by your side every step of the way, from submitting your application to finding the right lender and securing a loan that will work for you both now and in the future.
Commercial mortgages can be helpful to cover finance for areas in which a business loan can't. In addition, they can help provide large-scale finance to help grow and develop your business. This type of finance is the obvious solution when you want to buy a property for your business or if you're looking to invest in a property.
A commercial mortgage is a type of loan secured on property and works much like a residential mortgage, but there are a few differences you'll need to be aware of. For example, typically you will need a much larger deposit for a commercial mortgage. You may also need a specialist product, depending on what type of commercial property you are buying, and your current business interests might impact what you can borrow.
A commercial mortgage is ideal if you're looking to buy business premises or land for your business to operate from. It is also suitable if you're looking for a property to let out or develop as an investment. A loan of this type can provide the level of lending you need.
With a commercial loan, you can:
Generally speaking, business owners can use a commercial mortgage to purchase a property for their business to use, rent out, buy out another company, or unlock the equity within buildings they already own. Commercial mortgages cover a huge range of products and budgets, from small businesses buying their first premises to large organisations investing in portfolios.
Whatever type of property ou are buying, or already own, it's important to make sure your commercial mortgage works for you. This means finding a lender who truly understands your goals, how you work and what you need to succeed. From buying a care home to investing in a hotel venture, a commercial mortgage is one of the biggest decisions you'll need to make. Let's take a closer look at the types of commercial mortgages on offer, and how they work.
Typically, there are two different types of commercial mortgages:
This is a type of mortgage used to buy other property used for trading for your business. For example, if you are planning to buy a children's day nursery, then getting an owner-occupied mortgage can bring added value to your business as you will own the property as well as the operation. This is great for resale value, and also means you can invest in redevelopment without restrictions that come with renting.
You'll need a commercial investment mortgage if you’re planning to let your space out. For example, if you intend to buy an office block and have multiple tenants, or a commercial property portfolio, then this is what you'll need.
For some businesses, a commercial mortgage could be the solution to unlocking large-scale funds to invest in another part of your operation. First, you'll raise a new commercial mortgage on your existing property. Then you'll receive a cash lump sum to use as you wish, and you'll make monthly repayments until your mortgage term ends.
Suppose you already own premises, such as an office, factory or another commercial facility. In this case, you can use this to raise money, providing a cost-effective way to re-invest in your business. Then, with the money you've raised, you can buy another property, or use it to deal with a temporary cash flow issue, if one happens to crop up.
This approach isn't suitable for everyone, so it's important to work with an experienced team to make sure you are applying for the best product that will, ultimately, work with you and not against you. At Rangewell, we help businesses to find and secure commercial mortgages, so whether this is your first commercial property purchase, or you need to unlock funds to invest in a redevelopment, let us support you through the process.
Remortgaging a commercial property
if you already have a commercial property mortgage, then you might be considering a remortgage. There are several reasons why remortgaging could be on the cards, including:
Whatever your reason for remortgaging, one thing's for sure - you must shop around. It might be tempting to avoid the paperwork and return to your original lender, but it's likely that both the external situation and your own circumstances will have changed since you got your mortgage, so there may be better options available to you now.
Ready to chat about commercial property remortgages? Speak to Rangewell today.
Because of the legal and administrative costs, it's 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%. Each lender will have its own repayment charge and repayment term, and may have different variable rates, so bear this in mind when looking at your loan term.
Repayment options are similar to those for the residential market, but interest rates will be a little higher.
The lender will set the actual rate you pay on an individual basis. An established business with good prospects should be able to secure the most attractive rate.
Getting professional help with your application process, valuation fees, arrangement fee, and legal fees for your commercial mortgage can help you make substantial savings. Speak to Rangewell to see how we can help you source the best deal for your needs.
Commercial lenders generally prefer their borrowers to have some commercial property investment experience as operating mixed-use or commercial properties requires a greater level of understanding.
To increase your chances of being approved for business finance, you'll need the following:
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. Ask our brokers about variable interest rates today!
Peer-to-peer (P2P) can match lenders to borrowers. However, the application process can be long and complicated, and an application alone may not be enough to attract investors.
Online lenders tend to make a decision faster. Some will even allow you to upload documents electronically without dealing with monotonous piles of paperwork. In addition, with some online lenders, the funds will hit your bank on the same day you apply.
Specialist lenders are more than likely to provide business loans to people who might not meet the criteria of mainstream lenders. For example, if you’re a start-up and have no business history, have an adverse credit record, or work in a sector requiring unique funding needs, it can be hard to source what you need from market lenders. In that case, a specialist lender might be able to provide a solution that works for you.
Some other alternatives to bank loans include Invoice Financing, Merchant Cash Advance, and Inventory Finance.
Finding the most competitive mortgage deal across the entire market takes time and expertise.
At Rangewell, we have the expertise you need. We know the lenders who can offer the most competitive rates for all types of finance - including a commercial investment mortgage. We can work with you to ensure that a commercial mortgage really is the solution you need, and look at the alternatives.
Then we can help you refine your application and present it to the most appropriate lenders.
Commercial mortgages may be complicated to set up. We can help you through every step of the process. We might even be able to offer support if you're looking for a capital repayment holiday, too! Speak to a commercial mortgage broker today.
When you are considering large-scale funding for commercial premises, it is essential to get expert support. Coming to Rangewell means getting an expert team working with you.
We can explain the details, help you find the most appropriate lender, and help you develop your application to secure the most competitive rate.
Whether you're a sole trader or a limited company, we'll have a solution to suit your needs, if you'd like more information, then get in touch today.
Last update: 14 June 2024
Have a question?
Commercial Mortgages differ from residential mortgages in that there is no standard rate. The lender will set a rate based on an assesment of the business and its prospects for the future, and the type of property it is buying.
A Commercial Mortgage works much like a homeowners mortgage. It is a large-scale loan secured on the property being financed, which will be repaid by monthly repayment over several years.
Commercial Mortgages can be arranged to run over a period of years that reflects the resources available for the business to commit to repayment. Terms of 10, 15 and 20 years are common, but it is possible to run for longer periods than that.
Yes, a Commercial Mortgage can be used to buy all types of commercial property, including residential property which will be used for investment - which will usually mean that it will be let out.
The most common deposit amount for a commercial mortgage is around 25% and 40%.
Most lenders offer occupier mortgages with a 70% - 80% loan to value ratio for commercial investment mortgages. It's rarely above 75% unless the borrow has additional security to put up.
Get in touch with our experts to find out about the wider costs and what legal charge is involved.
No, it’s not possible to use a business mortgage to purchase a property to live in. It would need to have at least some commercial floorspace for a commercial mortgage lender to offer you a loan of this kind. Get in touch to find out more about our commercial mortgage rates.
How does a Commercial Mortgage work?
How can you use it to raise cash?
What are the costs?
What are the restrictions?
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