Commercial Mortgages
Commercial finance for owner-occupied premises, commercial investment property and mixed-use assets, structured around the property, cash flow, leverage and a credible repayment case.
Minimum commercial mortgage facility: £350,000
We normally respond on the same working day.
Repayment capacity assessed against sustainable trading income or rental cover.
Value, use, location, saleability and lender appetite considered together.
Investment cases assessed against rent, lease terms, covenant and void risk.
Owner-occupied, investment, mixed-use, refinance and capital-raising cases considered.
A commercial mortgage is more than a property valuation.
The security matters, but it is only one part of the decision. A lender also needs to understand who occupies the property, how the debt will be serviced, the resilience of that income, the borrower’s experience and what happens if the original plan changes.
We test cash flow, leverage, security, borrower credibility and the repayment structure before deciding which lenders should see the proposal. The aim is to identify weaknesses early rather than allow the lender to discover them during underwriting.
Commercial finance for occupation, investment and refinancing.
Owner-occupied mortgages
Purchase or refinance of premises occupied by the borrower’s own business, including offices, industrial units, warehouses, retail premises and professional practices.
Commercial investment
Finance for properties let to third-party businesses, assessed against rent, lease strength, tenant covenant and the sustainability of the investment.
Mixed-use property
Shops with flats, offices with residential accommodation and other assets combining commercial and residential use.
Refinancing
Replacement of an existing facility where the property and cash flow support a more appropriate long-term structure.
Capital raising
Release of equity against commercial property for a defined commercial purpose, subject to affordability and lender criteria.
Portfolio property
Finance involving several commercial units or properties where aggregate cash flow and concentration risk must be considered together.
Owner-occupied and investment cases are underwritten differently.
| Issue | Owner-occupied property | Commercial investment property |
|---|---|---|
| Primary repayment | Trading cash flow of the occupying business. | Contracted and sustainable rental income. |
| Core evidence | Accounts, management figures, bank statements and forecasts. | Leases, tenancy schedule, rent history and tenant information. |
| Main risks | Business performance, sector exposure and key-person dependency. | Void periods, lease expiry, tenant covenant and reletting risk. |
| Property test | Suitability for the business and alternative market demand. | Investment value, market rent, liquidity and saleability. |
| Affordability | Debt service supported by normalised operating cash flow. | Rental cover after realistic costs and lender stress. |
What commercial mortgage lenders will look at
Headline loan-to-value is rarely enough to establish whether a case works. Income quality, property type, leases, borrower credibility and the proposed structure all influence lender appetite.
Cash flow & cover
Whether rent or trading profit can meet interest and capital payments with enough margin for disruption.
Property & security
Location, condition, use, valuation, title, environmental matters and alternative demand.
Borrower credibility
Experience, financial conduct, ownership structure, equity contribution and the quality of information supplied.
Lease & tenant risk
Remaining lease term, break clauses, repairing obligations, rent reviews, arrears and tenant strength.
Sector & concentration
Exposure to one tenant, one business sector or one source of income can materially change the lender’s view.
Structure & exit
The borrowing entity, guarantees, other security and repayment route must form a coherent structure.
The amount a lender will advance is often constrained by income, not value.
Commercial lenders commonly apply debt-service or interest-cover tests to establish whether the proposed borrowing remains affordable after allowing for normal operating costs and a margin for stress.
For an owner-occupied property, the lender may normalise trading profit and adjust for exceptional income, one-off costs, director benefits or unusually strong recent performance. For an investment property, the lender will usually test the sustainable rent rather than simply accept the headline rent roll.
This is why a property can support a particular LTV on valuation but still fail to support the same loan on affordability.
The lender is interested in both current value and saleability.
Commercial property is not treated as interchangeable security. Specialist use, location, tenure, lease structure and alternative demand can all affect valuation and lender appetite.
A valuation that is lower than the borrower’s expectation does not merely affect LTV. It can change the equity requirement, pricing, structure and sometimes the lender altogether.
Complex does not necessarily mean unfinanceable.
Specialist lenders may consider unusual property, ownership or credit situations, but complexity needs explanation and credible mitigants.
Non-standard property
Specialist-use premises, short leases, partial vacancy, unusual construction or restricted alternative use.
Borrower structure
SPVs, group companies, overseas shareholders or a mismatch between property ownership and operating business.
Historic adverse credit
May be considered where the circumstances, current position and mitigants are clearly evidenced.
Approaching maturity
Existing lender pressure or a maturing facility requires early action because valuation and legal work still take time.
Short or weak leases
Lease expiry, breaks, arrears or weak tenant covenant can reduce value and sustainable income.
Capital raising
Use of funds must be specific and credible. Vague liquidity requests create uncertainty around repayment risk.
From initial assessment to lender-ready submission
Understand the transaction
Property, purpose, borrower, existing debt, timescale and proposed repayment structure.
Test the credit case
Affordability, leverage, security, lease or trading evidence and borrower experience.
Identify lender fit
Potential lenders considered against property type, sector, geography, ownership, loan size and complexity.
Prepare and present
The proposal is structured with the risks and mitigants made clear rather than left for underwriting to discover.
Manage completion
Valuation, legal work and lender conditions are monitored through to completion.
Information normally required
Requirements vary by transaction, but coherent information early in the process reduces avoidable questions and exposes problems while there is still time to address them.
- Property address, use, tenure and purchase price or estimated value
- Borrowing requirement, purpose, term and proposed repayment basis
- Latest filed accounts and current management information
- Business and personal bank statements where required
- Tenancy schedule, leases, rent statements and arrears details
- Ownership chart, company details and connected-party arrangements
- Assets, liabilities, existing facilities and existing security
- Evidence of deposit or equity contribution and its source
- Property schedule, photographs and condition or works details
- Explanation of historic adverse credit or exceptional items
Issues that commonly weaken a commercial mortgage application
Best-year affordability
Lenders normally adjust exceptional income and costs rather than simply accept the strongest historical year.
Overstated value
The lender relies on its valuation. A lower figure can reduce the loan and increase required equity.
Weak leases
Short terms, breaks, arrears or concentrated expiries can reduce sustainable income and value.
Unclear use of funds
Capital raising needs a specific, credible purpose rather than a general request for liquidity.
Title or legal issues
Restrictions, planning use, access, environmental matters or defective leases can delay or prevent completion.
No timing contingency
Commercial transactions involve several independent parties, so a rigid deadline needs realistic headroom.
Frequently asked questions
Commercial property finance guidance
Discuss a commercial property finance requirement
For commercial mortgage requirements of £350,000 or more, tell us what the property is, how it is used, the finance required and how the borrowing will be repaid. We can then identify the likely lender issues and evidence required.
EAS Finance is a credit broker, not a lender. Finance is subject to status, valuation, lender criteria and satisfactory legal due diligence. Property or other assets offered as security may be at risk if repayments are not maintained. EAS Finance is a trading name of Elite Admin Services Ltd (FRN 1044838), an appointed representative of White Rose Finance Group Ltd (FRN 630772), which is authorised and regulated by the Financial Conduct Authority. This page provides general information and is not a commitment to lend.