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A commercial mortgage could be the stepping stone to expansion

A commercial mortgage could be the stepping stone to expansion

In part two of Wesleyan Bank's blog series looking at commercial property ownership, we highlight the key considerations that should be taken when applying for finance to set your business on the road to a bright future.

The decision to buy rather than rent can be a pivotal moment marking the next step in helping your business to prosper and could enable you to move closer to achieving your career ambitions. Having located your preferred property, the next step is to select the right commercial mortgage solution.

Each provider will have alternative offerings including the minimum figure they will lend against the value of the property, different repayment periods and the availability of fixed or variable interest rates. Some may also impose limitations on the use of the property.

So, if your plans include sub-letting part of the building to offset some of the costs of the mortgage check with the provider that their terms and conditions allow this.

Before approaching a financial lender, it is important to determine the amount you can afford to pay each month. Many will have an online calculator to help with this, but providers will want to see proof that you can comfortably afford the projected monthly repayments.

Therefore, you will need to show tangible evidence you can make the repayments by providing bank statements, documentation detailing your trading history, cash flow forecasts, estimated outgoings in salaries and other expenses, as well as copies of sales contracts.

As well as carrying out necessary credit checks, financial providers will want to know about your background as well of that of key stakeholders involved in your business to assess your relevant trading experience. You may also be required to provide personal asset and liability statements.

When selecting a finance provider, it may be useful to ask about their specialist experience and knowledge of your industry sector. Do they possess an implicit understanding of the challenges your firm is likely to face and are they willing to offer you a flexible and bespoke solution to fulfil your particular business requirements? 

Just as with purchasing a house, buying a commercial property comes with associated fees and costs which need to be budgeted for. Make sure you have suitable financial provisions for arrangement and valuation fees, legal costs and stamp duties. As always, these figures can end up amounting to be more than you think.

Specialist lenders, such as Wesleyan Bank, will offer loans up to 85% of the property's value for owner-occupied trading premises with loan amounts from £100,000 to £5m over a term of ten to 25 years.

Whichever finance partner you opt for, make sure you can have detailed conversations with them so that they fully understand your business, its history and aspirations.

Choosing a financial partner who can support your long-term goals with a commercial mortgage solution that is tailored to your needs could be the catalyst to drive your business forward.

In doing so, you will benefit from having greater control over your finances and improved cash flow to be in a stronger position to invest in funding growth and expansion.

To find out more about tailored commercial mortgage solutions as well as other external finance options, call 0800 980 9340 or email

'WESLEYAN’ is a trading name of the Wesleyan Group of companies.

Wesleyan Assurance Society and Wesleyan Bank Ltd are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Wesleyan Financial Services Ltd, Wesleyan Unit Trust Managers Ltd, Practice Plan Ltd and DPAS Ltd are authorised and regulated by the Financial Conduct Authority.  Advice about investments, insurance and mortgages is provided by Wesleyan Financial Services Ltd.

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