Commercial Property Finance
If you’re buying a commercial property or refurbishing your existing premises, we can find the right property finance option for your business.
- Funding from £1,000 to £10 million
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A range of commercial property finance products exists on the market that can help fund the growth of your commercial property portfolio. Whether you are looking for a short-term arrangement to finance the renovation of your commercial premises or a long-term mortgage to fund the investment of a new property, we can help you find the right property finance deal for your business.
Use our commercial mortgage calculator below or read on to find out more about commercial property finance options.
Your mortgage details
Your results
Monthly Repayment
£11,010.18
Monthly Interest Only Repayment
£325.00
Arrangement Fee
£0.00
Total Mortgage Amount
£130,000.00
Total Repayable (full term)
£132,122.17
Total Interest (full term)
£2,122.17
This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.
THINK CAREFULLY BEFORE SECURING DEBTS AGAINST YOUR COMMERCIAL PROPERTY OR HOME. YOUR COMMERCIAL PROPERTY OR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
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What is commercial property finance?
The term commercial property finance covers a number of products offered to business owners and property developers who want to refurbish, renovate or invest in commercial property. This type of finance can be used for various property types, including offices, retail spaces, and warehouses.
With a variety of options available, you can find the best product to suit your growth objectives and current financial circumstances, whether you are acting alone, as an owner of a small business or as an established limited company.
Commercial Property Mortgages
Whether you are a sole trader or a limited company, there are two commercial mortgage types currently available to business owners.
1. An owner-occupied mortgage is available to those seeking trading premises. Lenders of owner-occupied schemes typically offer 75% mortgages over a thirty-year term. This usually requires a deposit of around 25% of the property value.
2. A commercial investment mortgage is available to commercial property investors, and up to 65% of the purchase costs may be funded by an alternative finance provider. This typically requires a higher deposit of approximately 35%.
Property Development Finance
For property developers seeking funds for new build projects, re-developments, renovation works and refurbishments, property development finance provides a short-term loan of up to 70% of the project value. This form of alternative business finance is typically repaid in regular instalments over twenty-four months. In some cases, a developer can secure 100% of the funds required for the project through joint venture finance for property development. Otherwise known as JV Finance, the investor supplies all the capital required throughout the project and receives a profit share on the sale of the development at the end of the project.
Commercial Bridging Finance
Commercial bridging finance, also known as a short-term finance bridging loan, provides the finance property developers may require to fund short-term projects. Alternative funding providers arrange such agreements where there is a definite exit strategy, such as the sale of a new build or completion of renovation works. Funds are generally provided over three to six months, during which time the project is completed. Repayments are made in instalments and some arrangements end with the settlement of a lump sum.
Portfolio Finance
If you have a number of commercial rental properties, you may wish to merge the cost of the properties into one long-term consolidation business loan. The assets, i.e. the rental properties, are grouped together into one portfolio with fees and terms being agreed based on the rental income.
Mezzanine Property Finance
Mezzanine property finance is a secured form of alternative lending that combines both debt finance and equity finance. It is often used to bridge the gap between a traditional mortgage, the developer’s own investment and the property value. It is typically secured by way of a second charge on the property. As well as providing additional finance if funds are lacking, mezzanine finance also enables the developer to minimize their investment contribution.
Auction Finance
If you wish to purchase a property at an auction room, funds can be secured in advance via an auction finance provider. Typically, this form of alternative finance is used by commercial landlords and property developers, although first-time buyers can acquire a low-cost property in this way. As funds need to be paid within a strict timeframe following the auction, this form of alternative finance provides an “agreement in principle”, giving the buyer the flexibility and budget to bid responsibly at auction.
Is my business eligible for a commercial property loan?
Commercial property finance is available to both limited companies and sole traders. As commercial property finance options vary, so too does the eligibility criteria for each product. However, in most cases, a good credit rating and evidence of a successful trading history will be required to secure this form of alternative finance.
Commercial property mortgage calculator
We have built a dedicated commercial property mortgage calculator to help you compare commercial property loans in the UK.
What are the typical commercial property finance interest rates?
Commercial property finance interest rates will vary from lender to lender. By using a commercial property finance broker, you can make sure you are getting the best deal on the market. A good tip is to also compare the arrangement fees, valuation fees, legal fees and if there are any broker fees applicable.
Commercial Property Finance FAQs
The best loan for commercial property depends on what you need it for. If you’re buying premises to trade from or to let, you’ll need a commercial mortgage, or if you’re working on a short-term or time-sensitive project, bridging loans, auction finance, or development finance might be more suitable. The easiest way to find the best commercial property finance for you is to compare eligible options.
Most lenders will ask you for a 25% deposit of the property value for an owner-occupied mortgage, and roughly 35% for a commercial investment mortgage. The exact amount depends on the lender, the property, and your circumstances.
Typically, most lenders require a deposit. But some finance options, like joint venture finance, can fund up to 100% of a project in exchange for a share of the profits. If you’re looking to reduce your upfront investment, you can consider applying for more funding through mezzanine finance.
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