Commercial Mortgages in Crawley

Commercial mortgages are long-term loans secured against commercial or mixed-use property, used either to purchase business premises, acquire investment property, or refinance existing borrowing. Unlike residential mortgages, commercial mortgages are individually negotiated — rates, terms, covenants, and structures are all tailored to the specific property, borrower, and business case.

At Commercial Mortgage Broker, we arrange commercial mortgages across every major property class: offices, retail units, industrial and logistics warehouses, care homes, hotels, pubs and restaurants, medical surgeries, nurseries, petrol stations, and mixed-use buildings with both commercial and residential elements. Our clients range from owner-occupier businesses purchasing their first trading premises to institutional-grade investors assembling multi-million-pound portfolios.

The commercial mortgage market is fundamentally different from residential lending. There is no standardised product range — every application is individually underwritten against two key pillars: the strength of the borrower (or the borrower's business) and the quality of the underlying property and its income stream. For owner-occupied properties, lenders focus on the trading performance and profitability of the business, typically requiring two to three years of filed accounts, management accounts, and cash flow projections. For investment properties, the emphasis shifts to the rental income, tenant covenant strength, lease length and terms, and the property's marketability should the lender need to realise their security.

Understanding debt service coverage ratios is central to commercial mortgage underwriting. Most lenders require rental or business income to cover mortgage payments by a ratio of at least 1.25 to 1.40 times, calculated at a stressed interest rate. This means the property or business must generate significantly more income than the mortgage costs, providing a buffer for unexpected downturns in income or increases in interest rates. The exact coverage ratio required varies by lender, property type, and borrower quality.

Commercial mortgage terms typically range from five to twenty-five years, though the structure can vary considerably. Many commercial mortgages feature an initial fixed-rate period of two to five years before reverting to a variable rate tied to Bank of England Base Rate or SONIA. Interest-only periods are common, particularly for investment properties where the income stream is strong. Some lenders offer fully interest-only terms for the duration of the loan, while others require capital and interest repayment from day one or after an initial interest-only period.

The deposit requirements for commercial mortgages reflect the additional complexity and risk involved. Most lenders require a minimum deposit of twenty-five to thirty per cent, equating to a maximum loan-to-value of seventy to seventy-five per cent. Certain property types — specialist assets such as hotels, care homes, and licensed premises — may attract lower maximum LTVs of sixty to sixty-five per cent due to their limited alternative use and potentially smaller pool of buyers. Conversely, strong owner-occupied businesses with excellent trading records may achieve up to seventy-five per cent LTV from supportive lenders.

Mixed-use properties — buildings that combine commercial ground-floor use with residential upper floors, for example — occupy a unique space in the lending market. Some lenders treat these as commercial throughout, while others offer hybrid products that recognise the residential element. The ratio of commercial to residential floor space typically determines which regime applies. We have deep experience structuring mixed-use deals and know exactly which lenders offer the most competitive terms for different configurations.

The application process for a commercial mortgage is more involved than residential lending. Expect to provide full business accounts for two to three years, up-to-date management accounts, a business plan or investment case, asset and liability statements for all directors or guarantors, details of existing borrowing, and a schedule of any other properties owned. The property itself will undergo a formal commercial valuation by a RICS-qualified surveyor, which typically takes two to four weeks and costs between fifteen hundred and five thousand pounds depending on property size and complexity.

Common pitfalls in commercial mortgage applications include underestimating the time required — straightforward cases take six to twelve weeks from application to completion, while complex structures can take three to four months. Borrowers often fail to appreciate the importance of tenant quality and lease terms to investment property lending; a property let on a short lease to a weak tenant will attract very different terms from one let on a long FRI lease to a national covenant. Additionally, personal guarantees are almost always required, even where borrowing through a limited company, and directors should understand the implications of guaranteeing the company's obligations.

Structuring is where an experienced broker adds the most value. The choice between fixed and variable rates, interest-only versus capital repayment, the length of any fixed-rate period, and the inclusion of specific covenants all materially affect the cost and flexibility of a commercial mortgage over its life. We advise on the optimal structure for each client's specific circumstances — a business that expects to sell the property in five years has very different needs from one purchasing a long-term headquarters. Similarly, an investor building a portfolio needs structures that allow future equity release and portfolio expansion, not rigid terms that lock capital away.

The legal process for commercial mortgages is more involved than residential conveyancing. Commercial property solicitors need to review leases, check planning compliance, investigate environmental and flood risk, review service charge accounts, and prepare more detailed certificates of title. Choosing a solicitor experienced in commercial property transactions is essential — inexperienced solicitors are the single most common cause of avoidable delays in commercial mortgage completions.

Our founder Matt Lenzie brings direct lending experience from senior positions at Lloyds Bank and Bank of Scotland, where he underwrote commercial property transactions from the lender's perspective. This gives our clients a genuine edge — we understand precisely what lenders want to see in an application, how credit committees assess risk, and where to position a deal for the best possible outcome. Combined with our extensive lender panel covering high street banks, challenger banks, building societies, and specialist commercial lenders, we consistently secure terms that borrowers cannot access directly. Our background in corporate finance and our ongoing advisory role with a pension administrator and trustee managing billions in assets under advisory further reinforces our credibility with institutional and specialist lenders.