Grow your business with commercial mortgage financing

Business mortgages offer many key benefits for obtaining a property, while alternative financing can help you develop and manage the costs of said property. 

A business mortgage imposes a lengthy repayment period that averages 15 to 25 years, with some lenders even offering 30-year mortgages. However, there are short-term financing options that can provide either an alternative to traditional mortgages or supplemental financing.

These alternative financing options include: 

• Property development loans: A property development loan helps businesses construct a building from the ground up. With a property development loan, funds are released periodically throughout the construction process as different construction milestones are reached to ensure the funds are used properly. These types of loans are not usually recommended for businesses seeking to renovate or expand an existing structure. 

• Bridging loans: When investing in property, you may experience waiting periods between the approval of a mortgage and actually receiving the funds. Bridging loans help you bridge this gap, providing you with the short-term funding you need to fund a property purchase or related expenses (i.e. legal services, arrangement fees, etc.) while you await long-term financing.  

• Working capital finance: To cover the secondary and tertiary expenses of a commercial property purchase (i.e. insurance, repairs, renovations, etc.), working capital finance can ensure you have the liquidity and financial stability to support expansion efforts. 

You can purchase a commercial property as either a limited company or a sole trader. 

Purchasing a commercial property as a limited company could protect your personal assets from business debts and legal claims, reducing your overall personal financial risk. 

Eligibility is determined by how long a business has been trading, their affordability as shown in their profit & loss statements and overall strength of the business

It’s important to consider the possible financial risks when making any property decisions. Aside from funding the purchase of the property, there are many additional costs and risks to keep in mind when acquiring commercial real estate: 

• Commercial mortgage fees: Fees like arrangement fees, mortgage broker fees, and valuation fees charged on a business mortgage can vary according to the lender. Additionally, the stamp duty land tax is required for properties costing £150,000 or more. Business owners should also consider the cost of legal services, such as insurance or site surveys. 

• Property development or renovation: For businesses that plan to expand on a property – either with a new addition to an existing structure, a renovation, or a completely new construction – you’ll need the financial means to cover the costs of property development. You will likely need to secure additional financing for property development projects. 

• Refinancing: If you opt into a business mortgage with shorter terms, you’ll need to refinance your commercial property more often. Depending on the market conditions, having to refinance your business property can expose you to new risks or more stringent terms. 

• Legal complications: Defaulting on a business mortgage might lead to legal actions and foreclosure over the property. 

Please note that asset finance typically requires an upfront deposit and there is less flexibility with early repayments.

Assess your needs: Calculate how much you want to borrow and decide whether a commercial mortgage is best—or if bridging loans or development finance might suit your short-term needs.

Check eligibility: Lenders look at your credit rating, business liquidity, and repayment history. A higher deposit may be required compared to residential loans, especially for interest only commercial mortgage products or if you have limited trading history.

Compare commercial mortgages: Commercial mortgage lenders offer varying terms, so shop around or use a broker to find current commercial mortgage rates uk that match your business profile. Funding Options by Tide can streamline this comparison.

Submit your documents: Expect to provide a property valuation report, business accounts, and proof of income. Lenders will want to see proof of deposit and your company's financials such as full accounts and bank statements.The deposit on a commercial mortgage can vary—often from 25% to 40%—depending on the lender and loan-to-value ratio. 

Use a business mortgage calculator: Tools like a commercial mortgage calculator or business mortgage calculator help estimate monthly repayments, factoring in principal, interest rates, and any fees. This step can highlight how different interest rates or deposit sizes affect total costs.

Yes. You can apply as either a limited company or a sole trader. Limited company borrowers often benefit from separating personal and business liabilities, though eligibility criteria may differ from sole traders.

A commercial mortgage is usually long-term financing (often 10–25 years or more), whereas bridging finance is short-term—used to “bridge” a gap until longer funding is secured. Bridging loans also tend to have higher interest rates but faster approval times.

Most lenders typically require a deposit of 25%–40%. The exact amount depends on factors like the property’s value, your business’s credit profile, and the lender’s loan-to-value criteria.

While a stronger credit score typically secures better rates, some commercial mortgage lenders cater to businesses with less-than-perfect credit. However, you may face higher interest rates or stricter terms.

Yes. A commercial mortgage calculator helps estimate monthly repayments, interest costs, and total loan amounts. It’s a quick way to compare different commercial mortgage rates or deposit scenarios before applying.