01
An owner-occupied commercial mortgage
Typically up to around 75% loan to value, assessed on your trading accounts and the affordability of the payment, over a term of five to twenty-five years.
Commercial
“My business rents its premises and I want to buy the freehold”
An owner-occupied commercial mortgage funds a trading business buying the premises it operates from, assessed on the business’s accounts rather than on a tenant’s rent. Leverage is usually better than for an investment purchase, but the process takes months rather than weeks.
An illustrative situation, not a client case study. It describes the kind of enquiry this market sees. Any figures are examples, not a quotation, and no credit check or lender decision is involved in reading this.
Sound familiar?
- Your landlord has offered you first refusal, or is selling
- Your lease is approaching its end and renewal terms are unattractive
- The business has two or three years of reasonable accounts
- The mortgage payment would be comparable to the rent you pay now
The situation
For a stable trading business, buying the premises turns rent into equity and removes the risk of a landlord selling out from under you. It is one of the more straightforward propositions in commercial lending.
The complication is usually timing. Landlords selling a tenanted building often set a short deadline, and a commercial mortgage cannot be arranged in a few weeks.
Why the usual lenders say no
- Commercial lending is a specialist area even within banks that offer it, and appetite varies by sector.
- Recent losses, a short trading history or a sector the lender dislikes can all cause a decline.
- The timescale is often the obstacle rather than the credit.
What usually works
02
Bridging first if the deadline is short
Where the landlord will not wait, a commercial bridge secures the purchase and the commercial mortgage refinances it afterwards. More expensive, but it keeps the building.
03
Presenting the accounts properly
Add-backs, director’s remuneration and one-off costs all affect how a lender reads profitability. How the accounts are presented frequently changes the outcome.
04
Considering a pension purchase
In some cases a SIPP or SSAS can buy the premises and lease them back to the business. That is a decision for your accountant and financial adviser, not for us.
Roughly how the numbers look
| Typical deposit | 25% to 35% of the purchase price |
| Term | Commonly 5 to 25 years |
| Assessment basis | Trading accounts and affordability, not rental income |
| Realistic timescale | Months rather than weeks |
A commercial valuation alone often takes several weeks. If the vendor’s deadline is shorter than that, bridging is the only route that keeps the deal alive. These are examples to show the shape of a deal, not a quotation. Work out your own figures in the bridging calculator.
What we would need from you
- Two to three years of accounts, plus recent management figures
- Six months of business bank statements
- Details of the property, its use class and condition
- The current lease and the proposed purchase price
- A business plan where the case depends on trading performance
- Director details and personal asset statements
Things that catch people out
- Start early. The single most common reason these purchases fail is running out of time.
- If the building is in poor repair, the valuation may come in below the agreed price.
- Personal guarantees are normal on owner-occupied lending. Understand what you are signing.
Questions we get asked
How much deposit do I need to buy my business premises?
Usually 25% to 35% of the purchase price. Owner-occupiers can sometimes access slightly higher leverage than investors, because the lender is assessing your trading business rather than a third-party tenant.
How long does a commercial mortgage take?
Longer than a residential one. The valuation alone usually takes several weeks and underwriting is more involved. Plan for months, and bridge if the vendor’s timescale does not allow it.
Are commercial mortgages regulated?
Generally not. Commercial lending sits outside the regulated mortgage regime, although a mortgage over a property partly used as a home can fall within it. We will tell you which applies to your case.
The product that usually fits
See how it worksEvery case is different. A specialist will confirm what actually fits yours.
Keep reading
Related situations and guides
“I want to buy a commercial unit but it is empty and lenders want a tenant”
The building is vacant, so a commercial mortgage lender has nothing to underwrite.
Read the scenario“I need to raise money quickly against a property I already own”
The equity exists but a remortgage will not complete in the time available.
Read the scenarioBridging loan exit strategies explained
Sale, refinance or something else: how lenders underwrite your exit, what evidence they want, and what happens if the exit slips.
Read the guideAll situations
Eighteen situations across bridging, development, commercial and buy-to-let.
Browse them allAmram Finance Ltd is a credit broker, not a lender. We do not lend our own money and we do not approve or issue loan offers.
Your property may be repossessed if you do not keep up repayments on a loan secured on it. Some forms of bridging finance and buy-to-let lending are not regulated by the Financial Conduct Authority.