IMB Blog

Commercial Mortgages for Trading Business

Are you a business owner planning to increase your portfolio or review your existing borrowing facilities? Or would you like to purchase or refinance your own trading premises? Commercial mortgage advisers have mastered the art of finding suitable lenders for all applicants. Commercial mortgages work in a unique way compared to the standard mortgages in the UK.

Competition has increased dramatically in recent years, with the introduction to the market of Challenger Banks and Specialist Lenders to compete with the traditional High Street Banks. This has made owning commercial property as a landlord or business owner more achievable than ever before.

The lack of high street lending availability

The above being said, the high street lenders have strict criteria in terms of commercial lending. It often rules out a number of potential applicants. Specialist lenders have entered the mortgage market space to provide applicants with suitable deals and other services.

Commercial mortgage application outcomes for SMEs in the United Kingdom (UK) 2019

Source- Statista

It indicates that specialist mortgage lenders have made things possible for business owners in terms of commercial mortgages. Specialist commercial mortgage providers would assist with first and second charge term lending on a vast array of properties including:

  • Retail Offices
  • Industrial and Warehouse Units
  • Dental, GP and Veterinary Practices
  • Nursing/Care Homes
  • Leisure and Hospitality including Public Houses
  • Restaurants, B&B, Guest Houses, Hotels
  • Gyms, Fitness Centers and Golf Courses

The role of a specialist mortgage broker

Commercial mortgage advisers are highly experienced across all aspects of the sector. Independent advisers are not tied to any product provider, meaning they could focus on your needs and find the right commercial mortgage lenders that will meet your requirements and maximize your potential for success.

Specialist commercial mortgage brokers enable you to access mainstream commercial mortgage lenders. They also give you access to a wide range of specialist commercial mortgage lenders, enabling them to offer a number of semi-exclusive products which are not available direct to the general public. This highlights mortgage intermediaries’ highly regarded reputation within the marketplace as key partner that provides not only a professional and efficient specialist mortgage service, but on operating with complete honesty, integrity and transparency.

Competitive specialist mortgage options

Mortgage intermediaries could help the applicants with a variety of mortgage solutions to help them achieve their business objectives. Cost of finance is an important element of the financial statements. Business owners aim to reduce the finance cost to add more value to the overall business. It results in better profit margins for the business.  

  • up to 75% loan to value when their bank is unwilling to lend/unable to lend
  • rates still available from 3.5% above BoE base rate
  • Interest-only options available
  • Up to 30 years term
  • Semi-exclusive credit impaired products
  • Sole Trader, Partnerships, LLP & Ltd Company solutions

Semi-commercial mortgages

Semi Commercial Properties generally consist of an element of both commercial and residential space. One of the most common of these types of properties is a retail shop on the ground floor with a residential flat above. Purchase of these properties is becoming ever more popular in light of the recent taxation changes for residential investments.

If you are looking at purchasing a Semi Commercial property, specialist mortgage advisers would enable you to have access to mainstream and a wide variety of specialist commercial mortgage lenders who specialize in these types of transactions. It is recommended that you always seek independent taxation advice, when purchasing investment property.

Why should someone consider a BTL Mortgage for a booming Trading Business?

If you already run a trading business and have surplus funds set aside to purchase residential buy to let property, it’s certainly possible to borrow through a growing number of lenders without the need to establish a separate Limited Company (SPV) potentially saving you time, energy and money.

You may want to consider a Trading Business Mortgage so that retained profits from your existing business can be made available for a deposit or you may simply wish to keep all of your borrowings and property assets in one company for ease. Whatever the reason, our expert advice can help you find the right deal for you.

There are different ways you can structure your property portfolio but finding the right one for you could save you thousands. Here are just some of the reasons to consider a Trading Business Mortgage:

  • You can use your retained profits as purchase deposits.
  • Less paperwork – it can keep life simple with one trading business, one set of accounts.
  • Rental stress tests are more lenient for companies compared to personal names.

Limited Company portfolio structures are becoming more popular than personal Buy to Let mortgages and with any property portfolio, applicants could speak to tax efficient advisers for specific tax advice, especially when purchasing in an already trading business, as there may be reasons to ringfence the property asset away.

Why You Should Use a specialist commercial mortgage Broker?

When considering the future of your property portfolio, a little expertise can go a long way and you’ll get 100% confidence that you have the best deal. You’ll benefit from the specialist portfolio knowledge to handle your unique needs.

  • You’ll get access to every possible deal on the market.
  • You’ll get advice based on the true total cost of your mortgage including all rates and fees, not just the initial rate – saving you long term.
  • You’ll get access to exclusive offers not available on the high street.
  • You’ll get access to the real decision-makers for your application – including underwriters, credit managers & senior personnel. Mortgage broker would speak to them directly on your behalf, to avoid any unnecessary delays.
  • Mortgage broker’s initial credit checks won’t impact your credit rating.

In conclusion, applicants would get a quick decision as the mortgage advisers handle the application from start to finish to get it completed quicker. Applicants would receive updates on their application at all times and have proper point of contact. Mortgage advisers provide straight forward, human advice, no automated responses. They would take the time to fully understand applicants’ needs to get the right mortgage solution.

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Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of our Independent Mortgage Brokers to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisers working for or with Independent Mortgage Brokers are fully qualified to provide mortgage advice and authorised and regulated by the Financial Conduct Authority. All our independent Mortgage Brokers will offer advice specific to you and your needs and circumstances. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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