Commercial Mortgages with Bad Credit

How can you get a great commercial mortgage if the business, owners, or directors have an adverse credit history? Here we explain how to mitigate bad credit issues and get your loan approved.

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Commercial Mortgages with Bad Credit

Businesses often assume that because they have bad credit, it will be impossible to secure a commercial mortgage. The Revolution team also receives regular enquiries from companies who have been turned down for mortgage finance and hadn't realised that a minor credit issue was going to cause such a problem.

Here we explain the ins and outs of bad credit commercial lending, and why working with an experienced broker is key to finding the mortgage lending you need.

For more help and advice, contact the mortgage brokers team on 0330 304 3040 or via email on info@revolutionbrokers.co.uk.

Can My Business Get a Commercial Mortgage with a Bad Credit History?

Contrary to popular belief, yes you can - and the right lender all depends on whether the business itself has had issues, or whether the business owner or directors have experienced the adverse credit.

The commercial mortgage market is enormous, and multiple specialist lenders can offer lending on terms that are adapted to your circumstances.

As a whole-of-market broker, Revolution can recommend any lender and any product in the UK, so there is always an option!

Is it Possible to Get a Commercial Mortgage if my Credit File Shows Defaults?

A default isn't as severe as bankruptcy, for example, but it can mean that a mainstream lender will automatically refuse your application.

If your default was within the past year, it narrows the number of lenders to apply to, but there are still specialist lenders who can help.

The longer ago your credit issues, the easier it is to find competitive lending. We can also offer advice about ways to make a bad credit commercial mortgage application more attractive and lower risk for lenders.

Are There Business Mortgages for Applicants with Repossession on their File?

While repossession is severe, you can find commercial mortgage lenders who will take a case-by-case view on whether to approve your application.

If the repossession was in the last year, it is vital to consult an expert bad credit broker who can negotiate terms with a lender.

How Can I Get a Commercial Mortgage with a Low Credit Score?

In many cases, commercial lenders aren't concerned with a credit score as such but will be more interested in whether adverse credit issues are showing on your file.

Commercial lending is more flexible than in residential mortgages, so there is always room to negotiate and leverage business performance to mitigate the risk of a bad credit scenario.

How Can I Get a Commercial Mortgage if I Have Bad Credit?

The best option is always to work with a professional, independent broker who can evaluate all other lending criteria as well as the bad credit issues to work out which lenders are best placed to approve your lending.

For example, you might be able to offer a larger deposit, or additional security, which will reduce the risk and ensure that you comply with the eligibility requirements of a specialist bad credit lender.

What are the Other Important Eligibility Factors In Addition to a Credit Check?

Credit checks are one of many assessments that a commercial mortgage provider will carry out. So if you have bad credit but can meet every other criterion, you have a much better chance of negotiating competitive rates.

  • Business profits - lenders will want to check your operating profit levels and ensure that the company can afford to keep up with the mortgage repayments.
  • Deposit - the higher the deposit, the lower the risk. Most commercial mortgages require between 20% and 40% as a deposit, but you can always offer a higher deposit or additional security.
  • Trading history - the longer you have been trading, and the stronger your industry experience, the better your application will be.
  • Business projections - if you can demonstrate viable business plans and forecasts, this may offset any concerns raised around bad credit issues.

Which Broker Can Help Me Find a Commercial Bad Credit Mortgage?

Brokers are essential in this scenario, as it can be impossible for a business to know which lender to apply to, or understand where the best rates are available.

Dealing directly with lenders can also be damaging, as if you apply to a lender whose criteria the business doesn't meet, they may still run hard credit checks. These appear on your credit file and can be detrimental to your credit score, even if the lender running the checks rejects your application.

Give the Revolution Brokers team a call if you need to find a commercial mortgage in a bad credit scenario.

What Does a Non-Status Commercial Lender Mean in Mortgages?

This sort of lending should be a last resort and not a viable alternative to a reputable lender recommended by your broker.

Non-status commercial mortgages are offered to businesses unable to meet the requirements of a mainstream lender. However, this product is FCA regulated and has been clamped down on, so are few and far between.

Our advice is always to consult an expert before going ahead with a non-status commercial mortgage as there are very likely to be more competitive products available.

Professional UK Support with Bad Credit Business Mortgages

If you've struggled to find commercial mortgage lending, or are concerned about the impact of bad credit on your application, give us a call.

The Revolution team are bad credit experts and will ensure that you get the best deals on the market. Get in touch at 0330 304 3040 or via email at info@revolutionbrokers.co.uk.

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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