Considering applying for finance for a new commercial property? As commercial financing specialists we source and secure commercial mortgages for companies looking to invest in properties across the UK, but in some cases we will also look at alternative funding routes. One of these popular options is residential mortgages, so read on to explore the difference between these options and discover which one is the best choice for your business. 

Which Mortgage is Right For You? 

If you are purchasing a residential property to turn into new offices, or if you are searching around to find the best rates, then you may have come across the term residential mortgages. These mortgages are long-term loans that are secured to purchase or refinance a property that will be lived in, and any building that is bought using these loans must be used as a residence – not a commercial property. Commercial mortgages on the other hand are used to acquire, develop, or refinance properties that are intended for business purposes, which include but are not limited to offices, retail premises, and industrial sites. 

So, how do you know which mortgage is the best choice for your business? 

Commercial Mortgages 

A commercial, also known as business, mortgage is the best choice for you if you are buying any property for business purposes. This includes if you are looking to buy a property that was once, or is currently, used for residential purposes if you are planning to refit this building for commercial purposes. This option is also the best choice if you are looking to purchase a building that is currently fitted for a different purpose, such as a restaurant or a vets, but are planning to strip these current fixtures out and redesign it to be a completely different business. It is also a quick way of releasing equity that is held in your business premises if you are in need of a large investment and are unwilling to pull the money from the business or secure a different loan. 

Unlike residential options, these commercial mortgages often have shorter terms, ranging from 5 to 20 years, generally come with higher interest rates, and include the option for balloon payments. This option helps to release funds quickly, but is used most often in commercial refinancing, so contact us today to unlock the best rates and terms for your needs. 

Residential Mortgages 

There are several times in life when a homeowner or a business owner may need to apply for a residential mortgage, including: 

1. When buying a new home, including apartments, and need financing to cover the purchase price.
2. When refinancing an existing mortgage to secure a lower interest rate, reduce monthly payments, or switch from an adjustable-rate to a fixed-rate mortgage.
3. When purchasing an additional property for personal use that is not intended for rental income or business purposes.
4. When planning to construct a home and need a loan to cover construction costs.
5. When you need to access the equity built up in your home, often for debt consolidation.
6. When relocating to a new area and financing the purchase of a new residence.

However, none of these scenarios include the purchase of a property for business use. If you are looking to purchase a residential building to use as a business premises, then you will need to do so with a commercial or business mortgage. 

Our Commercial Mortgage Services 

When applying for a mortgage to secure new premises for your business, your first step should be to reach out to our specialist team of mortgage and finance brokers. We will handle the entire process on your behalf and will consider the funding options that are available to suit your business and meet your financial needs, including funding between 70 and 75% loan to value (LTV), with higher LTVs available in certain cases. 

Once we have negotiated the best repayment terms for you, an initial interest-only period may be offered by your financiers to consolidate your cash flow when taking on a new loan, and we also have a track record of securing up to 25 year term loans. These sought-after terms give you the flexibility to manage repayments over a longer period of time and to prioritise your business’ financial stability without the concerns caused by unfavourable terms or unforeseen issues. 

Ready to Access the Funds You Need? 

To start your application, we only require 2 details from you – your company name and your contact email. So, if you have any questions or you are ready to get started, get in touch today and access the financial support that your company needs.