Commercial Property Finance and Commercial Mortgages

Commercial property finance funds the purchase, refinance or development of business premises: offices, retail units, warehouses, industrial buildings and mixed-use property. Sadi's Commercial Finance arranges commercial mortgages across the UK, comparing specialist lenders to match the property, the structure and the timescale you are working to.

As an NACFB and FIBA member firm working with a panel of more than 300 lenders, we place cases the high street will not consider, including complex ownership structures, unusual property types and borrowers with a limited trading history.

Who commercial property finance is for

Business owners buying the premises they currently rent
Investors buying commercial or semi-commercial property to let
Owners refinancing to secure better terms or release equity
Portfolio landlords expanding beyond residential
Limited companies and SPVs holding property as an asset

What we arrange

Owner-occupier commercial mortgages
Commercial investment mortgages
Semi-commercial and mixed-use finance, such as a shop with flats above
Refinance and capital raising against existing premises
Portfolio facilities across multiple properties
Short-term bridging where speed matters, with a commercial mortgage as the exit

How a commercial mortgage works

Owner-occupied or investment

Lenders treat the two differently. On an owner-occupier case they are lending against your trading business, so affordability is assessed on the accounts. On an investment case they are lending against the rent, so the tenant, the lease length and the strength of the covenant carry most of the weight.

Loan to value and deposit

Loan to value is commonly up to around 70 to 75 percent for owner-occupiers, and often lower on investment purchases. The exact figure depends on the lender, the property type and the quality of the income. Specialist and secondary property, or a short unexpired lease, will usually mean a lower loan to value and a larger deposit.

Term and repayment

Terms typically run from 5 to 25 years. Owner-occupiers most often take capital repayment. Investment cases are frequently available on interest only, which protects monthly cash flow but leaves the balance outstanding at the end of the term, so the exit needs to be thought through at the outset.

What lenders assess

The property. Type, condition, location, tenure and how easily it could be sold if the lender ever needed to.
The income. Trading profit for owner-occupiers, or rental income for investments. Investment lenders commonly want the rent to cover the mortgage payment with a margin, often quoted as a debt service cover ratio.
The covenant. Who the tenant is, how long the lease has left and whether the rent is likely to keep being paid.
The borrower. Experience, credit history, and the structure holding the property, whether personal, limited company or SPV.
The deposit. How much you are putting in and where it has come from.

Personal guarantees are common on limited company and SPV borrowing. That is normal rather than a red flag, but it is worth understanding what you are signing.

What commercial property finance costs

Pricing is set case by case rather than from a published rate card, which is one of the reasons comparing lenders properly matters. The costs to budget for are usually:

Interest. Fixed or variable, normally quoted as a margin over a reference rate. The margin moves with loan to value, property type and covenant strength.
Lender arrangement fee. Often in the region of 1 to 2 percent of the loan, sometimes added to the facility rather than paid up front.
Valuation. Paid by you, and priced on the property rather than the loan.
Legal fees. Yours and, on most commercial cases, the lender's as well.
Broker fee. Disclosed to you in writing before you commit to anything.

All figures above are indicative ranges to help you plan. Actual terms depend on the lender, the property and your circumstances, and are confirmed in the formal offer.

How long it takes

A straightforward commercial mortgage commonly completes in 6 to 12 weeks from application. Valuation and legal work are the usual bottlenecks, particularly where the title is complex or a lease needs varying. Where a deadline is genuinely fixed, such as an auction purchase, bridging finance can be used to complete quickly and then be refinanced onto a commercial mortgage.

How to get commercial property finance with Sadi's Commercial Finance

Speak to a specialist. Tell us about the property, whether it is owner-occupied or an investment, and the timescale you are working to.
Share the numbers. Deposit or equity available, trading accounts or the tenancy schedule, and the structure you intend to buy in.
Get matched with a lender. We approach lenders from our panel who suit your property type and structure, and secure an Agreement in Principle.
Valuation and legal work. The lender instructs a valuation while solicitors work in parallel to keep the timeline tight.
Offer and completion. Funds release on completion, sometimes in stages, to fund your purchase or refinance.

Commercial mortgages we have arranged

A London retailer secured £750,000 to purchase a second location, using equity released from their existing property. We arranged a five-year fixed-rate mortgage with staged drawdown.

We also secured a £1.2M commercial mortgage on a five-year fixed term for a freehold office building with a long-term tenant already in place. Read the full case study, or browse all our case studies.

Why use a broker for commercial property finance

Commercial mortgages vary enormously between lenders, and there is no comparison site that shows you the real market. One lender will not touch leisure property, another will price a short lease harshly, a third will be comfortable with an SPV structure that others decline. Approaching the wrong lender costs you weeks and can leave a footprint on your file.

Jaff Sadi spent more than 25 years inside UK high street and commercial banking before founding the firm, approving and declining the very applications brokers submit. That means we know how a case needs to be built and presented to get through credit, not simply to reach it. One specialist handles your case from the first call through to drawdown.

Frequently asked questions

How much deposit do I need for a commercial mortgage?

Commonly 25 to 40 percent, depending on whether the property is owner-occupied or an investment, the property type and the strength of the income. Specialist property usually needs more.

Can I get a commercial mortgage through a limited company or SPV?

Yes. Lenders are very comfortable with limited company and SPV borrowing on commercial property. A personal guarantee is usually required.

Can I refinance an existing commercial property?

Yes. Refinancing can secure better terms, move you off an expiring fixed rate, or release equity to reinvest in the business or buy the next property.

What property types can be funded?

Offices, retail units, warehouses, industrial units, semi-commercial and mixed-use property. Specialist assets such as care homes, leisure and hospitality are fundable but need lenders who understand the sector.

Can I get a commercial mortgage on interest only?

Often yes on investment cases, and less commonly for owner-occupiers. Interest only protects monthly cash flow but leaves the capital outstanding, so the lender will want to see a credible repayment plan.

What is a debt service cover ratio?

It is the test lenders use to check the rent comfortably covers the mortgage payment. The rental income needs to exceed the payment by a set margin, and the required margin varies by lender and property.

Do I need trading accounts?

For an owner-occupier purchase, normally yes, usually two to three years. Newer businesses can still be funded, but expect a lower loan to value and more focus on the strength of the property.

How quickly can a commercial mortgage complete?

Typically 6 to 12 weeks. Where a fixed deadline makes that impossible, bridging finance can complete in days and be refinanced onto a commercial mortgage afterwards.

Related guides

Speak to a specialist about your property, or apply for funding online.