Blog

Getting written indicative terms from two or three lenders, rather than just one, genuinely changes the conversation – lenders hold their best pricing back for deals they know are being seriously contested. Understanding the genuine difference between indicative terms and a formal Decision in Principle, and why securing both properly before you commit to a purchase matters, is worth knowing before you approach a single lender in isolation. Why Commercial Decisions Genuinely Work Differently to Residential Ones Our UK Commercial Finance hub covers the wider lending landscape; this page focuses specifically on why getting proper indicative confirmation matters so much before you commit to a specific property. It's worth knowing commercial DIPs are typically manual and underwriter-led, meaning a real person genuinely assesses your case individually, rather than relying on the automated credit scoring residential applications commonly use. The Genuine Two-Stage Process Worth Understanding It's worth being precise here: indicative terms are a non-binding outline – covering rate, fees, and likely loan-to-value – produced without a credit check or formal underwriting, typically available within 24 to 48 hours. A Decision in Principle comes after this, once a lender has genuinely reviewed your credit profile and basic financials. Treating these asRead more →

A commercial CON29 search currently costs £300.96 in fees alone – genuinely more than the £242.28 residential equivalent – and that's before the wider search pack, environmental report, and any specialist enquiries your specific property genuinely needs. Understanding what these searches actually reveal, and why lenders mandate them, matters before you assume this is simply a routine box-ticking exercise. Why Lenders Genuinely Won't Release Funds Without Proper Searches Our UK Commercial Finance hub covers the wider lending landscape; this page focuses specifically on what a local authority search genuinely uncovers before you commit to a commercial purchase. A Local Authority Search is almost universally required by mortgage lenders, and strongly recommended even in cash purchases, since it reveals genuine risks that could otherwise remain hidden until well after completion. The Two Genuine Components of a Standard Local Authority Search It's worth understanding this search is actually two separate products combined: LLC1, a statutory search of the Local Land Charges Register revealing registered charges like enforcement notices, conditional planning consents, tree preservation orders, and listed-building entries; and CON29R, a non-statutory but standard set of 23 numbered enquiries covering planning history, building control records, highway adoption status, contaminated land notices, and CommunityRead more →

The genuine question most lenders actually ask isn't simply "can you show two to three years of accounts" – it's "can you show two to three years of accounts, or credible projections if the business is newer". That second half of the question gets overlooked constantly, and understanding it properly matters if your business hasn't yet reached the trading history milestone most guides assume is mandatory. Why Two to Three Years Is a Genuine Preference, Not an Absolute Rule Our UK Commercial Finance hub covers the wider lending landscape; this page focuses specifically on what genuinely happens when your business hasn't reached this preferred threshold yet. It's worth understanding this length of trading history is genuinely what most lenders prefer to see, not a universal legal requirement – a smaller number of lenders will still consider newer businesses, generally on somewhat less favourable terms, rather than declining outright. What Credible Projections Genuinely Need to Include It's worth knowing detailed cash flow forecasts, projecting your genuine ability to service the debt across the full loan term, are what a lender wants to see standing in for missing historical accounts. These need to be realistic and properly substantiated, not simply an optimisticRead more →

Residential mortgages have settled into a fairly standard 10% penalty-free annual overpayment allowance – commercial mortgages genuinely have no such market convention at all. Assuming your commercial facility follows the residential rule you're already familiar with is a genuinely costly mistake worth avoiding before you make any significant overpayment or plan an early redemption. Why There's No Standard Overpayment Allowance on Commercial Mortgages Our UK Commercial Finance hub covers the wider lending landscape; this page focuses specifically on what your specific agreement genuinely says about redemption and overpayment, since there's no universal allowance to fall back on across the commercial market. Whether any penalty-free overpayment exists at all, and how it's measured, depends entirely on your specific facility's individual terms – it's worth reading your agreement properly rather than assuming a residential-style 10% rule applies. Why Fixed-Rate Commercial Facilities Often Use a Genuinely Different Mechanic It's worth understanding this clearly: rather than a simple percentage-based early repayment charge, many fixed-rate commercial mortgages instead use a break-cost calculation, reflecting the lender's own actual cost of unwinding the funding arrangement they'd committed to for your facility. This can produce a genuinely different, and sometimes considerably less predictable, cost than a straightforward taperingRead more →

A building let to four tenants can carry two genuinely different lease-length figures depending purely on which measure you're quoting – a WAULT to expiry might show 7.4 years of average income security, while the same building's WAULT to break, using each tenant's earliest exit right instead, could show considerably less. Understanding which figure your lender actually cares about matters before you assume your multi-let property's income is more secure than it genuinely is. Why Multi-Let Property Genuinely Needs Its Own Assessment Framework Our UK Commercial Finance hub covers the wider lending landscape; this page focuses specifically on financing a single building let to several separate tenants rather than one. Our Investment Mortgages page covers the standard single-let assessment; multi-let property genuinely requires a different lens, since your income security depends on the combined picture across every tenant, not any single lease alone. What WAULT Actually Measures It's worth knowing UK commercial property uses a specific metric for this: the Weighted Average Unexpired Lease Term, or WAULT, calculated by multiplying each tenant's annual rent by their remaining lease term, summing these figures across every tenant, then dividing by the total annual rent across the whole building. The result, expressed inRead more →

A headline "125-year lease" tells you almost nothing on its own – a lease granted 90 years ago for that same term has just 35 years genuinely remaining today, and that unexpired figure, not the original grant, is what a lender actually assesses. Understanding how freehold and leasehold commercial property are financed differently matters before you assume either tenure works the same way as the other. Why There's No Universal Minimum Lease Term for Commercial Property Our UK Commercial Finance hub covers the wider lending landscape; this page focuses specifically on how tenure genuinely shapes your financing options. Unlike residential leasehold, where lenders apply fairly standardised minimum thresholds, commercial leasehold lacks a universal minimum – instead, lenders assess whether the unexpired term genuinely covers your mortgage term plus a realistic marketable period afterward, on a case-by-case basis specific to your particular lease and lender. Why This Case-by-Case Approach Genuinely Matters to You It's worth understanding this means two commercial leaseholds with identical headline lengths can be assessed completely differently depending on the specific lender, the property type, and how much genuine unexpired term actually remains once you factor in when the lease was originally granted. It's worth having your solicitorRead more →

On a £750,000 commercial property bought at 70% LTV, a 1.5% arrangement fee comes to £7,875 – a figure that sounds significant until you spread it across a five-year hold, where it adds roughly 0.3% a year to your genuine cost of borrowing. Understanding which fees on a commercial mortgage can actually be negotiated, and which genuinely can't, matters before you compare quotes on rate alone. Why the Headline Rate Never Tells the Full Story Our UK Commercial Finance hub covers the wider lending landscape; this page focuses specifically on the genuine fee stack sitting alongside your interest rate. A lower headline rate paired with a larger arrangement fee can genuinely cost more overall than a slightly higher rate with modest fees, particularly on a shorter hold, where the fee is amortised over fewer years and bites harder as a proportion of your total cost. What's Genuinely Negotiable, and What Isn't It's worth understanding this split clearly: the arrangement fee and the interest rate margin are genuinely negotiable, particularly where you present a strong trading history, a low loan-to-value, or an existing relationship with the lender. External costs – valuation fees and Stamp Duty Land Tax – are generally fixed,Read more →

Qualified dental, medical, veterinary, and accountancy practices can access up to 100% LTV on their commercial premises, given how reliably regulated professional income is treated by lenders – yet a genuinely new practice without an established trading history often still needs family support to bridge the gap before that track record exists. Understanding how family-backed security genuinely works in commercial lending matters, since it's structured quite differently from a standard residential guarantor mortgage. Why Commercial Guarantor Support Isn't a Standardised Product Our UK Commercial Finance hub covers the wider lending landscape; this page focuses specifically on how family support genuinely functions here. Our Guarantor Mortgages page covers the residential version – a family member's savings, typically 10-20% of the property value, locked in a linked account for three to five years. Commercial lending genuinely lacks this same standardised structure; instead, family support is typically negotiated case by case, commonly through a family member offering property equity as additional security, or joining the application as a co-guarantor alongside company directors. How Family Property Can Genuinely Support a Commercial Application It's worth knowing the most common structure sees a family member's own property offered as additional security through a second charge, effectivelyRead more →

A property investor buying a £1.2 million single-let retail unit generating £80,000 gross annual rent might be paying a genuine 6.5% mortgage rate – but the lender assesses the deal at 7.5%, requiring rental income to cover interest by 125% at that stressed figure, not the rate actually being charged. Understanding this genuine gap matters more than almost any other single number in a commercial mortgage application. Why ICR and DSCR Are Genuinely Different Tests Our UK Commercial Finance hub covers the wider lending landscape; this page focuses specifically on the coverage ratio calculation itself. Interest Cover Ratio applies to investment purchases, dividing annual net rental income by annual interest at the stressed rate, since most investment commercial mortgages are interest-only. Debt Service Coverage Ratio applies to owner-occupied purchases instead, comparing your business's EBITDA against total debt service including capital repayment, not interest alone – a genuinely more demanding test given capital is included in the calculation. The Genuine Current Stress Rate Range It's worth knowing that with the Bank of England base rate at 3.75% in 2026, most commercial lenders apply stress rates of 7-8%, built as base rate plus a premium subject to a floor. High street banksRead more →

Most commercial mortgage lenders quote a maximum of 65-75% LTV, but that headline figure genuinely isn't a guarantee – even a property comfortably supporting 75% LTV on paper can see your actual borrowing capped lower once affordability stress-testing is applied. Understanding what genuinely gets you to the top of the range, rather than stuck below it, matters before you commit to a purchase price. Why Owner-Occupied and Investment LTV Genuinely Differ Our UK Commercial Finance hub covers the wider lending landscape; this page focuses specifically on what genuinely unlocks the higher end of the LTV range. Our Occupier Mortgages page covers buying to trade from yourself, where 70-80% LTV is genuinely achievable for established businesses; our Investment Mortgages page covers letting to a tenant, where 65-75% is more typical, given the genuine additional void and re-letting risk a lender takes on. The Genuine Checklist for Reaching the Top of the Range It's worth knowing lenders offering 75% LTV, rather than a more conservative 60-65%, are generally looking for at least two years of filed accounts showing consistent profitability, a clean personal and business credit history, a property in a genuinely prime, easily re-lettable location, and – for investment purchases specificallyRead more →