4 things you must know before getting a commercial mortgage

A commercial mortgage could help you to start an investment portfolio of rental properties, or even to get a shop or factory of your own, but sorting out business financing for property can be a headache.

There’s no doubt that in today’s climate, finding the best financing package for your commercial property can be essential.

commercial mortgages

Many businesses simply don’t have the capital to pay outright for business premises, and commercial landlords are now facing the financial effects of the 2020 coronavirus pandemic.

It follows that plenty of business owners are now in the market for a solid financing package at a reasonable rate – but they’re unlikely to get the very best rates unless they know a little bit about what to look for.

If you want to maximise the benefit of a commercial mortgage, keep reading to learn our top four tips for applicants.

1. Know your property inside out

Owing to current financial uncertainty, lenders are more reluctant than ever to lend for commercial property unless the applicant really knows their stuff. Banks just aren’t interested in dolling out cash to amateurs, and so to secure the best chance of a commercial mortgage offer, you need to know your stuff.

Of course, you’ll already have conducted your own due diligence process on any commercial property you’re looking to buy, but double down on that research and take another look around.

From measuring out the true size of your proposed premises through to knowing about any boundary issues or whether there are any pressing maintenance jobs, having an in-depth understanding of the property you’re looking to buy will appease lenders and help to build the trust needed for a successful commercial financing relationship.

2. Have your books in order

mortgage documents

Getting a residential mortgage is all about showing how responsible of a borrower you are, but getting a commercial complex can be a little more complex. Instead of just demonstrating income and affordability, you’ll need to account for a lot more if you’re to secure an offer.

Before making applications, it can help to get everything in place, and this is where working with your accountants and professional advisors can make all the difference.

Armed with a summary of your business operations, assets, turnover, liabilities, and profit, you can demonstrate that you not only know your stuff but also that you have a viable business proposition – factors that might help a commercial mortgage lender to feel at ease.

Just remember to get a handle on any VAT payments that might come attached to the purchase of a commercial property, as these can be very costly.

3. Find the best rates


With so many lenders on the market, it can be difficult to know where to go first when looking for a commercial mortgage. Fortunately, modern business means that all the hard work can be done for you simply by using a comparison site like Business Comparison. With the ability to compare the commercial mortgage rates and terms of over 30 leading UK lenders, shopping around really is the order of the day.

Comparing commercial mortgage from as little as £150,000 with no maximum figure, applying for a business mortgage could hardly be simpler. By finding a deal, you could find the best solution for your business without having to approach multiple lenders on an individual basis.

4. Don’t be afraid to play off providers against each other

Straight out of the personal car insurance rulebook, playing commercial mortgage providers off against each other could be the answer to getting the best rates around. With the knowledge you’ve gained from comparing deals via a comparison site, you can then start to play hardball by asking for better deals.

Negotiating could be as simple as asking them to match another provider’s lower rate, or even asking for preferential lending terms to compensate for a higher interest rate. In any case, this is your money – so don’t be afraid to ask for a better deal on your commercial mortgage.