Funding via Commercial Mortgages

A business mortgage—commonly referred to as a commercial mortgage—is a widely utilized financial instrument designed to facilitate the acquisition of commercial property or land. These loans typically offer long-term repayment structures, with terms extending up to 25 years, making them a foundational option for enterprises seeking to establish or expand their property holdings.

For clients requiring shorter-term financing for property acquisition or refurbishment, alternatives such as bridging finance or development loans may provide a more appropriate solution.

Commercial mortgages operate similarly to residential mortgages, involving structured monthly repayments that encompass both principal and accrued interest. The loan-to-value (LTV) ratio—often up to 75%—defines the proportion of the property’s value that a lender is willing to finance.

Eligibility for a commercial mortgage is primarily determined by the applicant’s trading history and financial performance. Most lenders require two to three years of filed accounts to assess the company’s repayment capacity and overall creditworthiness.

As a form of secured lending, the mortgage is collateralized against the property or land being financed. In the event of default, the lender retains the legal right to repossess the asset in order to mitigate financial loss.