How Can Loanable find me a Commercial Mortgage?
If you are in the commercial real estate market or have properties that are HMO/houses in multiple occupation, you know the unique aspects, and challenges you can face finding financing for such properties.
With commercial real estate investments, the risks are great, and so are the rewards. That is why it is important to find a lender that not just fits your needs, but also one you can develop and build a relationship with.
As not all properties and commercial ventures are the same, you need lenders who are flexible, understand the market, and can cater to your specific borrowing needs.
Loanable is that broker!
With the various types of loans available, and the different types of properties on the market, you need a credit broker who can find you with the lender that fits your needs exactly.
Loanable works with many different lenders and helps to tailor your loan to your requirements.
Looking for a loan today?
What is Commercial finance or a Commercial Mortgage?
Many properties are not just owner-occupied houses or flats, they may be a shop, offices, a factory, storage depot, any type of property that is outside the typical residential type, such as a house or flat, can be considered of a commercial nature.
Usually commercial properties are those that house a business, or some aspect of a business, such as offices, or even storage facilities for equipment.
Loanable can help you find the commercial financing you need for:
- Mixed use properties: these can be shops with a residence attached
- HMO’s: house in multiple occupation, these are shared accommodation houses where more than one family or person lives, and shares a communal kitchen or bathroom
- Blocks of flats
- Unusual or different property types: such as garages, depots, etc.
Whatever the commercial property type, loanable can help you find the financing.
Even if it is a start-up commercial venture, Loanable can help!
- Professionals in the field of lending, commercial or personal loans
- As a broker we do the shopping around for you to find you not just the best deal, but the best loan suited for your needs
- Speed: time is money, and at Loanable we know it, you need your financing quickly as to not lose out on a good deal and savings
- Loanable does not charge any upfront fees
- We work with a range of commercial lenders and brokers to try and you the right mortgage
- Online application, should take no more than a few minutes to complete
- Your details are safe with us, we never, ever sell or exchange them…ever
Looking for a commercial mortgage or some form of commercial financing, complete our easy online application today!
FAQs about Commercial Mortgages
What is a commercial mortgage?
Mortgages can be broken down into three (3) categories:
* Residential: This is a mortgage on a property someone intends to reside or live in. An owner occupied mortgage.
* Buy-to-let: These mortgages are for landlords, those that buy properties to let out, and not for themselves to live in.
* Commercial: A commercial mortgage is a loan on a building or piece of property that is for commercial business, not a residence, although there may be a residence on the premises. This may be office spaces, shops, stores, any place where business is being conducted out of.
What is the interest rate on a commercial loan or mortgage, I cannot find them listed?
Interest rates for commercial mortgages and loans vary, and they vary among lenders, and due to each borrower’s circumstance.
Interest rates can be dependent on:
* The property value
* What is being used as security
* Credit history
How are payments set-up for a commercial mortgage?
Payments for commercial mortgages are handled in the same manner as any other loan or mortgage. Payments are monthly and are based on the amount borrower, interest rate, and term of the loan.
Is a valuation needed for a commercial mortgage?
Yes, a valuation of the property will be required on the property, the cost of this valuation maybe paid for by the lender but can also be required to be paid for by the borrower.
Do I need to be an LTD company to get a commercial mortgage loan?
No, not necessarily. A sole-ownership or partnership company can receive a commercial mortgage as well. The person applying will be looked at in the same manner as a company, such as deposit, credit history, etc.
I have found a piece of land I wish to build on and have offices and shops built there, can I get a commercial mortgage for this?
Probably not, this sounds as though you may need more of a development loan. This would get you started on the development of the property, which you then later may require a commercial mortgage.
I want to buy and renovate a building into flats and office spaces. Can I just get a regular mortgage or maybe a buy-to-let mortgage?
Probably not, as soon as you mention office spaces, it is a commercial venture. Even some blocks of flats may not qualify for a BTL mortgage, but need a commercial mortgage.Probably not, as soon as you mention office spaces, it is a commercial venture.
How long can I get a commercial mortgage for?
Commercial mortgages can be from a few years, to as long as 20 years or more. The longer the term, the lower the monthly payments, so this can also affect how you qualify for the loan.
My company has been in business for 18 years and are quite successful. Will I be required to guarantee the mortgage?
If your company has been in business for 18 years, with a proven track record of sales, and the company can show it is profitable, then there is a high probability a guarantor may not be required.
I am just starting to get into the commercial real estate game, and have bid on a property near me which is a newsagent, and has flats above. Do I need a commercial mortgage, and can I get approved for one?
If there is a commercial business attached to the flats/building, then yes, you need a commercial mortgage.
Regarding this being your first venture into the commercial real estate world, yes, you can get approved, your deposit, credit history, and affordability factors will be looked at, but yes, you can get a commercial mortgage.
How much of a deposit do I need for a commercial mortgage?
That is a good question, and the deposit amount can vary according to lender, the borrower, affordability, and valuation of the property.
Usually 25% or more is required for a commercial mortgage, however, there can be considerations given for market value, and also if other securities are provided or given as collateral.
Can I have more than 1 commercial mortgage, and can I have more than 1 with the same lender?
Yes, it is possible to have more than one (1) commercial mortgage, and also yes with the same lender.
It will depend on the borrower’s circumstance.
Many companies that are in the commercial real estate business like to work with the same bank or lender, as they have developed a working relationship.
I am buying a property for way under the valuation, do I still need a deposit?
Probably yes. Lenders in the commercial real estate market look at two figures, the purchase price, and the “open market value”, and they use the lower of these to base their lending criteria.
It’s great that you will get a good deal and instant equity, but you will still be required to have a deposit.
Can I get an interest-only commercial mortgage?
Yes, there are lenders that offer interest-only commercial mortgages.
I am buying a shop on the street where we live, and it has a flat above it and I plan to live there. Do I need a commercial mortgage?
Commercial mortgages are not regulated by the FCA/Financial Conduct Authority, unless, 40% or more of the property is used “or in connection” with a dwelling or residence.
As to if you need a commercial mortgage can be determined by if you will be using the shop for a commercial business, if it is required to pay business rates, and the size of the shop in comparison to the residence.
Any property that has a commercial element to it, requires a commercial loan.
Chances are, you need a commercial mortgage.
I own quite a few commercial properties all with good tenants, the properties are fairly valuable as they are in London and I have owned them for over 10 years. My company is experiencing a bit of a cash flow and I have found some office spaces we wish to invest in. Is I possible to pledge equity from our other properties as a deposit for this new property?
Yes, it may be possible, but there can be many factors and issues that can arise and need to be met. Various commercial lenders may consider this, but some may not. We would need to know the full details of your situation, and what you outline to do, things like the property’s sale price, its valuation, equity you have in other properties and details like that.
I have a BTL mortgage on a building that I own in my name, I now wish to add office spaces to the property and my current mortgage company state I would now require a commercial mortgage loan. How do I go about this?
You may first need the property to be classed as commercial in order to get a commercial mortgage, which may require planning permission. Once the property has been established as a commercial property you simply apply for a commercial mortgage, which would pay off your existing buy-to-let mortgage.
Have you looked into any pre-payment fees,or penalty fees to pay the BTL loan off early? Yo may wish to also explore this as well.
My current loan on my shop and store is in just my name, I wish to change it over to a LTD company I am just starting-up, can I do this. I know I will require a commercial mortgage loan.
You will first need to set-up the LTD company, and then sell the property to the LTD company and they need to seek out a commercial loan. You may still be required to sign as guarantor as the LTD company will be new, with no proven track record.
I already have a commercial mortgage on my shop and wish to remortage it to release equity I have. Can I do this?
Yes, depending on the value of the property, and your current mortgage balance, you may be able to release some equity.
Are there any fees for a commercial mortgage?
Yes, there can be arrangement fees, possibly solicitor’s fees, and a valuation fee.
Can I apply for a commercial mortgage in principle, before I purchase a property?
There may be some commercial mortgage lenders that will review your situation and give you an idea as to what you may qualify for, but most will want to know if you have a purchase in place and an accepted offer.
How long does the entire process take?
Once you have found a property, a valuation needs to be done, and an offer of finance put into place. This can take anywhere from 4 to 12 weeks.
I have been refused a mortgage loan in the past, can I still apply for a commercial mortgage?
Yes, do you know why you were denied a loan in the past? Was it due to credit, or was there an issue with the valuation of the property?
There can be numerous reasons why a loan could be denied. You can always apply again.
What insurances will be required?
As a condition of the loan a buildings insurance policy will be required, depending on the nature of the businesses on the property, you may be required to have a commercial liability insurance policy.
Are there early repayment fees or pre-payment penalties with a commercial mortgage?
Yes, there can be. These will be outlined in the terms and conditions of the loan and should also be explained to you.
What happens if I lose tenants in the building and cannot pay the mortgage or struggle to pay it?
The majority of mortgage lenders understand these things can happen, especially with commercial properties. You need to stay in contact with your mortgage provider, and they may be able to work with you until you can get new tenants in.
Can I get a commercial mortgage on interest only?
Yes, many mortgage lenders will offer commercial mortgages as interest only. This helps in keeping the mortgage payments low so you the landlord can be competitive in your lease pricing.
I am buying a commercial property for under the market value, will I still need a deposit?
Yes, many commercial mortgage lenders work off the lower end of the sale price or the market value. As the sale price is lower than the value, you will still need a deposit, however, it will only increase your equity position.