The 3 types of commercial property finance and how they can help your business

Commercial property finance can be a big step in your career, whether you want to purchase your own property for commercial use or finance a property to let in order to generate additional income.

Commercial property finance covers a wide range of services or products to help you buy, refinance or grow your commercial property portfolio. Commercial properties can be defined as the following:

  • Office buildings
  • Retail and commercial units across a variety of sectors
  • Warehouses
  • Industrial buildings
  • Semi-commercial properties (these have both a commercial and residential element e.g. pubs or bed and breakfasts)
  • HMOs, also known as ‘House in Multiple Occupation’ or ‘House of Multiple Occupants’. This refers to residential properties with at least three tenants living there who form more than one household

Anyone can apply for Commercial Property Finance, but it’s worth knowing which type of finance is the best fit for your needs. Every application is different as previous credit and business history, future objectives and current circumstances will vary and will therefore affect the application process and ultimately the outcome.

The 3 types of Commercial Property Finance are as follows:

Commercial / Business Mortgages

This is the most popular option when it comes to owning your own commercial property or buying-to-let, and work in a similar way to a residential mortgage in that you pay a set amount each month to work towards owning the property.

They can come with either fixed or variable interest rates and can last from as little as 3 years up to 25 years. Each property is individually assessed and priced based on the value of the property, location and the risk to the lender.

Property Development Finance

If you’re a property developer or investor and want to build or develop regeneration projects, this could be the best option for you. Property Development Finance allows you to secure funding in order to move forward with regeneration and the finance is typically secured against it. 

This is a much shorter option in comparison to a commercial mortgage as this typically lasts around two years.

Commercial Loans

If you’re looking for a quick and easy way to secure financing, a commercial loan might be your best option. There are a variety of options available including start up loans, commercial bridging loans, secured business loans and unsecured business loans.

Due to these typically having larger loan sizes, the lenders take a much more bespoke view of your business and are therefore more likely to approve in comparison to the rushed approvals process of other finance routes.

In conclusion…

There are so many options out there for businesses that it can be difficult to know which one to go for! Navigating the many different streams of financial aid can be a confusing and time-consuming process.. 

A team of business finance experts can help to create a tailor-made and stress free solution fit for your needs, as well as helping you to present your business in the best possible light for investors. Consider whether this would benefit you in the long run and if so, get in touch!

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