Almas Uddin
Founder and Mortgage Advisor
26 Jun 2020
When you are looking for a commercial mortgage, there are multiple lenders on the market to consider. It can be complex to compare different rates, terms, and fees.
Revolution Brokers are on hand to help you make sense of the market, and find you the best deals to match your requirements.
Choosing the right lender depends on your circumstances, and what you need to achieve from your commercial financing. An experienced broker will help you understand the different types of lending products on the market so that you can make an informed decision about the best route for your business.
If you need any help with finding the right commercial mortgage lender or would like some more information about the terms available, give the Revolution commercial team a call on 0330 304 3040.
Commercial mortgages vs residential mortgages
One of the most common misconceptions is that a commercial mortgage will be the same as a residential mortgage. There are a few distinct differences to be aware of:
- Most commercial mortgages require a higher deposit.
- Terms and the length of the mortgage are flexible and can be adjusted to meet with your business goals.
- Lenders will decide whether to lend and how much they can lend, based on your business trading history.
- Interest rates and lender fees tend to be higher than residential mortgages.
- The affordability assessment relies on the operating profit or EBITDA of your business.
- Commercial mortgages are bespoke and will be offered based on your trading circumstances.
The best UK commercial mortgage lenders
From high street mortgage providers to mainstream banks, niche funders and specialist mortgage companies, there are a vast number of mortgage lenders to choose between.
Particularly for a commercial mortgage, the best option is to work with a professional broker who can assess your business needs to identify the most suitable mortgage lenders.
We work to get to know your business to be able to make an independent recommendation - this include factors such as:
- What budget you are working with.
- How much deposit you have available.
- Your business trading, income and overheads.
- How your credit rating score looks.
- Where the property is you want to invest in.
- What type of property you are looking to purchase.
Commercial mortgages with adverse credit
While it is more challenging to secure a commercial mortgage with an adverse credit history, you can still access a competitive mortgage.
Speak to Revolution Brokers today on 0330 304 3040 - we will work with you to identify options for securing mortgage lending with providers who are happy to extend you an offer.
Specialist commercial mortgages
Different lenders take a different view on which factors of the application process carry the most weight. Some mainstream lenders will not accept applications from businesses or individuals who have experienced bankruptcy or CCJs in the past.
Others will consider these applications and may charge higher interest rates in acknowledgement of the higher risk.
Some lenders will take a case-by-case view on adverse credit ratings, and may ask to understand the circumstances around your credit file to decide whether these scenarios are likely to be replicated again.
Other mortgage providers are more focused on deposit value, security available and the LTV ratio and may be willing to extend an offer to applicants with bad credit.
High street commercial mortgages
Most mainstream lenders and high-street banks offer some form of commercial mortgage. However, their rates may not be competitive when compared to specialist commercial mortgage providers and may have limited scope for negotiating rates and terms.
Halifax commercial mortgages - available at an LTV capped at 60%, so a minimum deposit of 40% is required. Halifax tends not to publicise their commercial mortgage rates, and accept applications only through a broker.
Barclay's commercial mortgages - available at an LTV capped at 70%, although each application is assessed individually, so the lending offered is dependent on your appraisal. Personal circumstances are analysed as well as business activities, and the lending criteria are strict.
HSBC commercial mortgages - HSBC do not have a maximum value on commercial mortgages and offer up to 75% LTV. However, the interest rates offered, and the amount of funding available is heavily dependant on your company trading history.
Santander commercial mortgages - only available through brokers. Santander does not publish their rates, fees or available terms. Lending is available from a minimum of £25k and you will need to work with a broker to access the rates and understand if this is the best lender for you.
NatWest commercial mortgages - heavily based on credit scoring. Most NatWest commercial mortgages are secured through a broker, so if you would like to assess the lending options available, give Revolution Finance a call.
Semi-commercial mortgage options
A semi-commercial mortgage is usually provided by a specialist business mortgage provider, rather than a residential mortgage lender.
To understand more about semi-commercial mortgages and how these compare to other financing options, give us a ring on 0330 304 3040 or drop us an email at [email protected].
Mainstream commercial mortgage lenders
While many specialist lenders can offer extremely competitive rates, some high-street lenders offer commercial mortgage options.
We strongly recommend working with your broker to compare the rates and terms available from mainstream vs niche lenders before committing to long-term debt.
High-street lenders offering commercial mortgages include:
- Nationwide
- TSB
- Lloyds
- Metro Bank
- Danske Bank
- Kent Reliance
- Fleet
- Virgin
- Prudential
- RBS
- Woolwich
Help with a commercial mortgage application
If you need help with applying for a commercial mortgage, get in touch with Revolution Brokers and we will work through the application process with you. Our top tips include:
- Do your homework - if you apply to multiple lenders at once and haven't checked who offers the best rates, your credit file will show multiple checks and lenders may be reluctant to make you a mortgage offer.
- Work with a professional - a mortgage is a substantial and long-term debt, and you should be confident that you are getting the best deal.
- Have your accounts available - for any commercial mortgage, a lender is going to need to see up to date accounts and that your mandatory filings have been made on time. If your accounts are not up to date, you should do this before applying for a commercial mortgage.
- Be aware of your net worth - your lender will want to see your net assets, so it is advisable to prepare a schedule of assets and liabilities to have this information readily available.
Contact us now to discuss your personal options, Revolution Finance Brokers specialise in commercial and residential finance in Essex, Kent, London and Hertfordshire.
Revolution Finance Brokers are UK experts in commercial mortgage lending. We work with an established network of specialist lenders and can negotiate to achieve attractive offers and highly competitive rates.
Our consultants offer professional support throughout the mortgage application process. We will recommend alternative products if we believe they are better suited to your needs and will prove to be more cost-effective.
Give us a call on 0330 304 3040 or email us at [email protected].
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