When it comes to buying a space for your business, there are various financing options available. Commercial mortgages offer a way to secure a loan using the property itself as collateral
Which types of properties qualify?
The good news is, commercial mortgages can be used for a wide range of business locations. This includes familiar options like offices, shops, warehouses, and factories. It also extends to specialised properties like farms, care homes, restaurants, and pubs. Certain sectors, like social care and agriculture, have a high number of specialist lenders who cater to the unique needs of those businesses.
Beyond Ownership: Investment Opportunities
Commercial mortgages aren’t just for buying property you’ll use yourself. You can also utilise them to finance investment properties that will generate rental income through business tenants. This approach functions similarly to how residential buy-to-let mortgages work.
Properties with a Twist: Mixed-Use and Limited Company Options
There are also mortgages designed for properties that blend residential and commercial elements. These “mixed-use” mortgages cater to business owners who live and work from the same location, or those who want to rent out a property with both residential and commercial spaces.
For those looking to invest in residential properties for rental income through a limited company structure, there are specialised “limited company buy-to-let” mortgages available. This approach can offer tax advantages depending on your specific situation.
Financing Your Development Dreams
If your vision involves constructing a new property, “property development mortgages” provide the financial backing to get things started. These are typically short-term loans designed to cover the building phase, with the idea that the completed property will be sold or refinanced at a higher value.
Short-Term Needs: Bridging the Gap
Commercial bridging loans offer a way to access quick funding for your commercial property needs. These short-term loans are secured against the property itself and can be used for various purposes, such as covering unexpected expenses or refurbishment costs.
Complex Structures: Opco/Propco Financing
For companies seeking to separate their property assets from their operating business, an “Opco/Propco” (Operating Company/Property Company) structure might be an option. This can involve the operating company becoming a tenant of the property company, potentially leading to favorable commercial mortgage terms based on the rental income generated.
Finding the Perfect Fit
Navigating the world of commercial mortgages can feel overwhelming. Fortunately, we have a team who specialise in commercial property finance. We can guide you throughout the whole process making it as smooth as possible for you.
Did you know as part of White Label Resources Ltd we’re excited to provide tailored solutions for businesses at all stages, offering comprehensive support in finance, accountancy and law. No matter your size, we’re here to equip you with the tools and expertise needed to thrive.
Case Study
Our client, a Leicester-based hair salon, sought to expand their operations by acquiring additional commercial premises. The acquisition would provide the necessary space to increase staffing, introduce new products or services, and accommodate future growth.
Commercial Mortgage:
- £120,000 Secured Loan
- 20 year term
- 5 year fixed
To discuss the options available to you, get in contact with one of our specialist finance brokers today for a free consultation
