Commercial Finance Questions Answered by Specialist Brokers

A commercial mortgage is a loan secured against a commercial property — such as an office, retail unit, warehouse, industrial unit, mixed-use building or development site. Unlike residential mortgages, commercial mortgages are assessed based on the property's income potential and the borrower's business or investment track record.

Commercial mortgages are used by business owners buying their own trading premises (owner-occupied), and by property investors purchasing commercial buildings as investments (investment commercial mortgages).

Most commercial mortgage lenders require a deposit of 25–40% of the property value, meaning they will lend up to 60–75% LTV (loan-to-value). The exact requirement depends on:

• The type of property (retail, office, industrial, mixed-use)
• Whether it's owner-occupied or investment
• Your trading history and financial strength
• The lender's appetite for the sector

Some specialist lenders will go up to 80% LTV in certain circumstances — for example, strong trading businesses or properties with good rental income. A specialist broker can identify which lenders will offer the highest LTV for your specific case.

Commercial mortgage rates in 2025 typically range from around 5.5% to 9%+ depending on the lender, LTV, property type, borrower profile, and whether the rate is fixed or variable.

Rates are generally priced as a margin above a base rate (Bank of England base rate or LIBOR equivalent). The strongest applications — low LTV, strong trading history, prime property — attract the most competitive rates. Higher-risk applications will face higher rates.

Because rates vary significantly across 100+ lenders, using a whole-of-market broker is the best way to ensure you're getting a competitive rate for your circumstances.

Commercial mortgage applications typically take 4–12 weeks from application to completion, though complex cases can take longer. The main stages are:

• Indicative terms: 24–48 hours with a broker
• Formal application & underwriting: 2–4 weeks
• Valuation: 1–2 weeks
• Legal completion: 2–4 weeks

Having a specialist broker manage the process — preparing documents properly upfront and maintaining lender relationships — significantly speeds up timelines.

Yes — some specialist lenders will consider applications with adverse credit history, including CCJs, defaults, or missed payments. The key factors they'll assess are:

• How old the adverse credit is (older is better)
• The severity (a small default is treated differently from a bankruptcy)
• Whether it has been satisfied
• The strength of the rest of the application (property quality, deposit size)

High street lenders will typically decline these cases, but specialist lenders exist precisely to serve borrowers with more complex situations. A whole-of-market broker can identify which lenders are most likely to accept your application.

A bridging loan is a short-term secured loan designed to "bridge" a gap — typically between purchasing one property and selling another, or between purchasing a property and arranging longer-term finance. Common uses include:

• Buying a property at auction (which requires completion in 28 days)
• Purchasing a property that isn't mortgageable in its current condition
• Completing a purchase quickly before selling another property
• Funding a refurbishment or conversion before refinancing
• Raising capital quickly against an existing property

Bridging loans are typically interest-only, with terms of 1–24 months. They're more expensive than long-term mortgages, so they should always be used with a clear exit strategy.

Bridging loans can be arranged significantly faster than traditional mortgages. With an experienced broker and cooperative solicitors, it's possible to complete in as little as 5–10 working days, though 2–4 weeks is more typical.

Factors that speed up the process include: a clean title, a straightforward exit strategy, prior AML documentation ready, and a broker who has existing relationships with the lender.

Bridging loan rates in 2025 typically range from around 0.5% to 1.5% per month, depending on the LTV, security quality, borrower profile and exit strategy. That equates to roughly 6–18% per annum.

Because interest is charged monthly, bridging loans are best suited to short-term needs. Most borrowers either roll up the interest (paid at redemption) or service it monthly.

A broker can often access exclusive rates not available directly to borrowers, particularly from specialist lenders.

Regulated bridging loans are governed by FCA rules and apply when the security property is, or will be, the borrower's main residence (or a close family member's). These loans carry more consumer protections.

Unregulated bridging loans apply to investment properties, commercial properties and developments where the borrower doesn't intend to live in the property. Most bridging finance for property investors is unregulated.

A buy-to-let (BTL) mortgage is specifically designed for properties that are rented out to tenants rather than occupied by the owner. Key differences from residential mortgages:

• Affordability: BTL lenders assess whether rental income covers the mortgage (typically 125–145% of monthly interest), rather than using personal income alone
• Interest rates: BTL rates are usually slightly higher than residential rates
• Deposit: Most lenders require 20–25% minimum deposit for BTL vs 5–10% for residential
• Regulation: Most BTL mortgages are unregulated unless the borrower or a family member intends to live in the property

To qualify for a standard BTL mortgage you typically need:

• A deposit of at least 20–25% of the purchase price
• The expected rental income to cover at least 125–145% of the monthly interest at the lender's stress rate
• A minimum personal income (many lenders require £25,000+, though some have no minimum)
• A reasonable credit history
• To be aged 18–85 (upper limits vary by lender)

Portfolio landlords with 4 or more mortgaged properties face additional underwriting requirements introduced by the PRA in 2017, including a full portfolio assessment.

This is one of the most common questions we receive and the answer depends entirely on your personal tax situation, portfolio size and long-term plans. In general:

• Limited company (SPV) can be more tax-efficient if you're a higher-rate taxpayer, as corporation tax rates are lower than income tax rates, and mortgage interest remains fully deductible
• Personal name may suit lower-rate taxpayers or those planning to sell soon, as it avoids stamp duty and legal costs of setting up a company

BTL mortgage rates for limited companies are typically slightly higher than personal name, though the gap has narrowed. We strongly recommend speaking to a tax adviser before making this decision.

An HMO (House in Multiple Occupation) is a property rented to three or more tenants who form more than one household and share facilities such as a kitchen or bathroom. Larger HMOs (5+ tenants) require a mandatory licence from the local council.

Yes — standard BTL lenders generally won't lend on HMOs. You need a specialist HMO mortgage lender, who will assess the property differently — typically based on the gross rental yield rather than a single tenancy agreement. HMO mortgages often allow higher loan amounts relative to value because of the higher rental income.

Since September 2017, the Prudential Regulation Authority (PRA) classifies any landlord with four or more mortgaged buy-to-let properties as a portfolio landlord. Lenders must apply more rigorous underwriting to these applications, including:

• A full assessment of the entire portfolio (not just the property being mortgaged)
• A portfolio business plan in some cases
• Stress testing all properties at a higher rate
• More detailed financial information

This means not all BTL lenders will accept portfolio landlord applications. Specialist lenders and brokers with strong relationships in this space are essential.

Development finance is specialist short-term lending used to fund property development projects. Unlike standard mortgages, development finance is drawn down in stages as the build progresses — you don't receive the full loan on day one.

It covers ground-up new builds, conversions (e.g. office-to-residential), heavy refurbishments, and permitted development projects. The loan is typically repaid when the completed properties are sold or refinanced onto long-term mortgages.

Development finance lenders typically lend up to:

• Up to 65% of the Gross Development Value (GDV) — the projected value of the completed development
• Up to 100% of build costs in some cases, subject to overall GDV limits
• Land purchase and build costs combined up to 70% LTV on some schemes

First-time developers will typically face lower LTV limits and may need to demonstrate relevant experience (e.g. project management, planning, or working with an experienced contractor).

No. Brevio does not charge upfront broker fees. We are paid a commission by the lender when your deal successfully completes. This means our interests are fully aligned with yours — we only earn when you get a successful outcome.

Some lenders charge arrangement fees (typically 1–2% of the loan), which are standard across the market and paid to the lender, not to us.

No. Getting a quote from Brevio does not affect your credit score. We use soft credit searches in our initial assessment, which are not visible to other lenders and have no impact on your credit profile.

A hard credit search only takes place when a formal mortgage application is submitted to a lender, which only happens with your explicit consent.

We have access to 100+ lenders across our panel, including high street banks, challenger banks, specialist commercial lenders, bridging lenders, development finance providers, and private funds.

Being whole-of-market means we're not tied to any single lender and have no incentive to recommend one over another — we simply find the best deal for your circumstances.

We aim to respond to all enquiries within 24 hours on working days, often sooner. For urgent bridging or time-sensitive cases, please use the live chat on our website and let us know your deadline — we will prioritise accordingly.