We specialise in providing commercial mortgages.
We work with a significant volume of commercial property, developers and landlords. CMB have an experienced team of advisers who work with a network of leading commercial mortgage lenders with exclusive rates and solutions tailored to your business needs.
Our lenders provide quick decisions. Indicative commercial mortgage terms will normally be provided within 24 hours. An agreement in principle can normally be expected within 48 hours, once the initial application form has been processed.
- Fast indicative terms for commercial mortgages.
- Prompt commercial mortgages decisions from lenders.
- Competitive rates of finance for commercial mortgages.
- Award winning lenders on our commercial funding panel.
- Highly experienced commercial finance team.
- We put the right deal to the right commercial lender.
Founder - SL Developments
Was struggling to secure finance for my next commercial to residential project and was about to give up when an associate recommended that I talk to CMB. Several weeks later and my finance was in place and I secured the project and it is now well under way. Really pleased with the service. They are educated experts and I would definitely recommend them. I look forward to working with them on my next project.
What types of properties can you arrange commercial mortgages for?
Properties and land often used as security for commercial mortgages include:
- Office buildings.
- Warehouses/industrial units.
- Shopping centres/shops.
- Care homes.
- Nursing homes.
- Doctor’s Surgeries.
- Veterinary practices.
- Blocks of flats.
- Hotels/guest houses.
- Agricultural land.
- Funeral Parlours.
What is the meaning of a commercial mortgage?
A commercial mortgage normally means one of two things, either the property has a commercial activity associated with it, such as a restaurant, an office, or a factory, or the owner of the property is carrying out the activity of owning the property on a commercial basis, i.e. they are a professional landlord, or alternatively a property may have a mixed use, such as residential upstairs and commercial downstairs in which case it may still be considered to be a commercial premises by lenders. There are specific rules relating to what qualifies as a residential premises and normally the rule from lenders is that at least 75% of the property needs to be residential for it to qualify as residential, please note that this is subject to lender approval.
A commercial mortgage will typically have higher interest rates than a standard residential mortgage, as there are a number of different factors that the lender will need to take into consideration, these are:
- The covenant of the tenant – how likely they are to default
- The income that the commercial property generates
- The term of the rental agreement
- The resale value of the property
How does a commercial mortgage work?
A commercial mortgage works in a similar way to a residential mortgage.
First a lender will underwrite the transaction, a lender will evaluate the property, getting it independently valued (at the borrowers cost), and then they will look at the income that the property is generating, this will be subject to various income and valuation tests, the first of these is the loan to value (LTV), which is the loan amount against the value of the property. The second test that lenders carry out is whats called an interest cover test, this works out what percentage of the monthly interest payment the rent will cover, most lenders are typically looking for 175% interest cover these, i.e. 1.75* the monthly interest amount. The final element that the lender will evaluate is the borrower, their history and their ability to keep up with the required payments.
If the lender is happy with all of the above then they will offer formal terms, and then if the borrower is happy with the proposed terms then the transaction will enter in to the legal process, where the lender is granted security over the property in return for providing funding, which can be used to pay off other debts or used as cash flow.
A commercial mortgage will normally have a fixed rate period of between 1-5 years, after which it will revert back to the lenders standard variable rate, details of which will be provided within the paperwork, and most commercial mortgages have a term of between 3-25 years, but it is possible to get different terms from these with certain specialist lenders.
When would a commercial mortgage be a suitable finance option?
- Business owner-occupier who wants to buy a property and use it as trading premises for your business.
- Commercial property investor who wants to buy a property and let it out to a business you don’t own.
- Residential property investor who wants to buy a multi-unit freehold block to let to tenants.
- A commercial or residential property owner with a varied portfolio of properties who wants to remortgage under one potentially cheaper mortgage.
- Highly experienced bank trained team.
- £1bn+ of assets funded to date.
- Large panel of lenders.
- Property experts.