Business Loan to Buy Property in the UK

If you want a business loan to buy a business property in the UK, you can borrow a secured or an unsecured business loan. For instance, you can get a holiday let mortgage to develop a property that is then rented out to tourists for a short period. You can get a commercial property mortgage for a period ranging between 2 years and 25 years.

Types of Commercial Mortgages in UK

  • Commercial property mortgage
  • Owner Occupied commercial mortgage

What is Commercial Property Mortgage?

A commercial property mortgage is a loan that is secured using a property that you don’t reside in. A commercial property mortgage lasts from 3 years to 25 years and usually charges between 70-75% loan to value ratio. Loan to value ratio is the measure to compare how much you are borrowing in relation to the value of the property.

How to Qualify for a Commercial Property Mortgage

If you are shopping for a commercial property mortgage, you must be eligible. To qualify for a commercial property mortgage in the UK, you need to:

  • Make a deposit of between 20% and 30%
  • Be the homeowner
  • Have some savings in the bank
  • Proof of evidence of income

Commercial Mortgage Lenders

There are many commercial mortgage lenders you can use to get a commercial property mortgage in the UK. When a commercial property loan is over, commercial mortgage lenders normally give business loans to complete the project. In this case, they give larger amounts that are unsecured. Some of the best commercial mortgage lenders include:


NatWest is a commercial mortgage provider in the UK for up to 25 years. It does not charge arrangement fees with flexible terms and customer repayment holidays. You can access their mortgage even if you are not their business customer.

NatWest Mortgage Features

  • Fixed and variable rates
  • Loan duration of up to 25 years
  • No arrangement fees for new customers
  • Repayment holidays
  • Provides expert property advice
  • Minimum of £35,000 with no maximum limit

Atom Bank Mortgage

Atom is an online bank in the UK that offers a UK bank account via Atom bank app as well as number of other products including mortgages. Their mortgages are branded as “digital mortgages by Atom bank.” Atom bank mortgages attract fixed rate mortgage for the first 2 to 5 years of your term. Atom mortgage loans are only available through independent UK brokers.

Atom Mortgage Features

  • Mortgages are available for a period of two or five years
  • The average Atom bank mortgage rate is 2.69% for a 2-year period
  • You can borrow up to 4.5 or 4.75 times of your annual income
  • You can overpay on your mortgage by up to 20% each year without any charge


RBS is a UK bank that offers commercial mortgages. You can get a mortgage to expand and develop new premises. The mortgage can be tailored to meet your business needs at a fixed or variable rate. They offer repayment holidays at the beginning of the period.

RBS Features

  • Terms up to 25 years
  • Minimum mortgage of £35,000
  • No early redemption fees
  • No arrangement fees
  • You get a dedicated relationship manager
  • Offers fixed and variable rates



HSBC offers commercial mortgages that you can use to expand and improve your premises. HSBC offers a flexible with a range of repayment options.

HSBC Mortgage Features

  • Minimum mortgage of £25,000
  • Repayment period of 2 years and 30 years
  • Has fixed or variable rates
  • You can borrow up to 75% of property value
  • There is repayment holidays in the first 2 years


Lloyds Bank

Lloyds Bank is a commercial mortgage lender that offers business loans to buy property in the UK. You can borrow up to 70% of the property value. You will have to pay arrangement fees, security and valuation fees.

Lloyds Mortgage Features

  • Variable and fixed rates
  • Loan term of between 1 year and 25 years
  • There are repayment holidays
  • Minimum borrowing amount is £25,000


Owner-Occupied Commercial Mortgage

An Owner-occupier mortgage is a mortgage that is used to buy or develop property that is to host your business. As such, the property acts as trading premises for your business. You can use an owner-occupied commercial mortgage to secure financing to acquire a building, improve a property or even refinance an existing property. To qualify for an owner-occupied commercial mortgage, you must occupy more than 51% or more of the building.

Commercial Real Estate Loans

A commercial real estate loan is a mortgage secured by a lien on a commercial property rather than a residential property. The financing can be used to finance the development or expansion of business properties like shopping malls, office buildings and retail malls. The development of these properties is achieved through commercial real estate loans.

Features of Commercial Real Estate Loans

  • Commercial real estate loans are often given to business entities like corporations and limited partnerships.
  • Commercial real estate loan loan to value ratio is usually between 65% and 80%.
  • Commercial loans last between 5 years and 20 years while the amortization period is longer than the loan term.

Commercial real estate interest rates and fees are usually higher due to several factors like appraisal legal, application, sure by and origination fees.

Commercial Investment Property Loans

It may seem intimidating to get a commercial investment property loan but when you learn about the process, you realize that it is possible to get it. To obtain a commercial investment property loan, you need to:

  • Decide whether you are going to file as an individual or an entity
  • Decide which commercial real estate loan is going to work best for the property in question
  • Determine the commercial mortgage LTV to find out the value of the loan to the value of the property
  • Determine the ability to repay the commercial investment property loam using debt service coverage ratio

Refinancing Commercial Property

Commercial property refinance involves taking a new loan to pay off an already existing loan. The reason for refinancing commercial property loans is to help investors to secure better loan terms. Other reasons for refinancing commercial property can include:

  • Avoid balloon payments since commercial loans mature faster compared to residential mortgages.
  • Another reason is to get cash for property improvement with the idea in mind that when the improvements are done, they will charge tenants higher rent, thereby increasing profits.
  • Secure better loan terms. Refinancing when rates are low can lower your monthly payouts, thereby increasing your cash flow.

Conclusion on Commercial Property Mortgage in the UK

If you are seeking to buy, develop or improve a business property, you can borrow a business loan. There are a variety of loans that you can borrow to buy or develop property like refinancing commercial property loans, commercial real estate loans, owner-occupied commercial mortgages, or commercial property mortgages. There are many mortgage lenders in the market that can lend you a loan to buy property in the UK.

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