Mortgage guide
Mortgage for a business property
A mortgage for a business property is a form of commercial mortgage used to purchase, refinance, or release capital from premises that are occupied or used by a trading business.
- Published
- 13 Apr 2026
- Last reviewed
- 11 Sep 2026
- Reading time
- 3 min
Mortgage for a business property
A mortgage for a business property is a form of commercial mortgage used to purchase, refinance, or release capital from premises that are occupied or used by a trading business. This includes offices, shops, warehouses, factories, hospitality venues, and other commercial buildings where the property is integral to business operations. Unlike residential lending, these mortgages are underwritten on a business and asset basis, not personal income multiples.
Who Uses a Business Property Mortgage
Business property mortgages are commonly used by:
- Owner-occupiers purchasing their trading premises
- Established businesses refinancing existing property debt
- Companies acquiring premises to support expansion or consolidation
- Sole traders, partnerships, limited companies, and SPVs
The structure of the borrowing entity and the financial strength of the business directly influence lender appetite and terms.
Loan-to-Value (LTV)
Mortgages for business properties are typically available at up to 70-75% loan-to-value, depending on property type, trading performance, and risk profile.
- Mainstream asset classes (offices, industrial, warehouses) attract higher leverage
- Specialist or trading-led properties are assessed more conservatively
- Strong balance sheets and stable profits support higher LTVs
Loan size is often driven by affordability rather than valuation alone.
Affordability and Credit Assessment
Affordability is assessed on the trading performance of the business. Lenders will review:
- Historic accounts and management information
- Profitability, cash flow, and debt service capacity
- Business stability and trading history
- Forecasts where expansion or growth is involved
Debt Service Coverage Ratios (DSCR) are applied, with stress testing to ensure the business can service the loan under adverse conditions.
Valuation Methodology
Business property valuations depend on use and income profile:
- Vacant possession valuations are common where the property is owner-occupied
- Yield-based valuations may be applied where the property is income-producing or leased
Valuers also assess marketability, alternative use potential, and exit risk.
Interest Rates and Loan Terms
Pricing reflects both business risk and property type. Loan terms typically range from 15 to 30 years, with repayment, interest-only, or hybrid structures available. Rates are set on a risk basis and vary depending on leverage, sector, and financial strength.
Business mortgage lending criteria
Lenders will focus on:
- Stability and sustainability of the business
- Property suitability for continued use or resale
- Sector-specific risks and market demand
- Financial structure and management capability
A mortgage for a business property enables businesses to own or refinance their premises using long-term commercial finance. Lending decisions are driven by business performance and asset risk rather than residential affordability, making preparation, structure, and realistic expectations central to securing sustainable funding.
Commercial mortgage calculator
Choose owner occupier for a business buying or refinancing premises it trades from, assessed on adjusted net profit before tax from the latest accounts, or investment for property let to tenants, assessed on lease income.
Commercial mortgage criteria
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Criteria | Detail |
|---|---|
| Max Loan to Value (LTV) | 80% LTV Care Home Mortgages, 100% LTV Medical Commercial Mortgages, 75% Commercial Investment |
| Max Term | Up to 40 years |
| Completions | From 4 weeks |
| Repayment options | Capital repayment and Interest only |
| Commercial mortgage rates | From 6.19% |
| Rate options | Variable, Base Rate Tracker, 2, 3 or 5 year fixed mortgage options |
| Valuation methods | Going concern/Investment (Market value 1, MV1), MV2, MV3 or bricks and mortar |
| Flexible Leases | Rolling leases, weak covenants and short time remaining accepted |
| Adverse credit | Accepted on some products on a case by case basis |
| Locations | Available in England, Scotland, Wales and Northern Ireland |
| Experience | Not required on certain products |
For context, these are the wider product terms covered by this guide. Availability and eligibility depend on your circumstances and the lender.
| Feature | Detail |
|---|---|
| Max Loan to Value (LTV) | 65% |
| Product fee | 5% (4.74% for existing customers) |
| Fixed rate (5 years) | 6.34% |
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Frequently asked questions
Can my pension rent property to my business?
Yes. A SSAS or SIPP can let commercial property to the member's own business, provided the lease is on commercial terms at a market rent, usually set by an independent valuer, because deals with connected parties must be at arm's length. The business can normally deduct the rent as an expense, the pension pays no income tax on it, and the rent can repay the pension's mortgage. If the rent is below the market rate, HMRC can treat the difference as an unauthorised payment. Some SIPP providers have their own rules on tenants connected with the member.
Can a start-up business get a commercial mortgage?
Yes, on an asset-backed basis. In our experience lenders advance around 65% to 75% of the property's value, and the case is stronger with sector experience, a credible business plan, projections and a larger deposit. Owner-occupied routes suit start-ups better than investment lending.
Is stamp duty different on commercial property?
Yes. In England and Northern Ireland, commercial and mixed-use purchases pay stamp duty at the non-residential SDLT rates, a separate schedule with no additional-dwelling surcharge, so mixed-use classification can change the tax materially. Scotland has its own Land and Buildings Transaction Tax and Wales its own Land Transaction Tax.
What is a bridging loan for commercial property?
A bridging loan for commercial property is a short-term, property-backed loan used to purchase, refinance, or stabilise commercial or mixed-use assets when a commercial mortgage is not immediately available. It is exit-driven, typically capped around 75% loan-to-value, and repaid through sale or refinance rather than ongoing affordability.
Can you get a mortgage above a commercial property?
Yes, you can get a mortgage on a property above a commercial unit, but it is classed as mixed-use or non-standard. Lenders assess the type of business below, access arrangements, lease terms, and resale risk, with fewer lenders and in some cases higher deposit requirements than standard residential properties.
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