The Client
Our client’s business is a limited company that has traded as a mini-supermarket, established in the area for more than 15 years. The business had been extremely profitable and growing year on year, with the premises held on a long lease.
The Scenario
The landlord was looking to sell the premises, making it the perfect time for our client to purchase their trading premises outright as an owner-occupier. The client was also able to take on the flat upstairs and the car park at the back, which they now use for their customers.
The Solution
We used the business accounts for the last three years to evidence how well the business had been running, with consistent profit each year. Our client had always been up to date with their rent payments, and better still, the mortgage payments for the commercial unit could be supported from the rental income generated by the flat upstairs.
There are scenarios where lenders may not even consider income from the commercial part of a property if the mortgage already fits using rental income from the residential element alone, sometimes because a residential unit is generally easier to let given market demand. Having access to multiple lenders in this space, and working with those who take a genuinely common-sense approach to lending, has been beneficial for our client’s case.
Summary
Lender appetite for the commercial and semi-commercial mortgage market can shrink significantly during periods of wider economic uncertainty. Our expertise and lender relationships mean we can continue offering these products to clients even when the market tightens elsewhere. Lenders generally take a sensible, common-sense approach to how repayments are structured when the case is presented properly.
Frequently Asked Questions
Can a business use its trading accounts to buy its own commercial premises?
Yes, lenders will typically want to see several years of accounts showing consistent profitability.
A strong, well-established trading history makes a real difference to how confidently a lender will assess the application.
Can rental income from a residential flat support a commercial mortgage?
Yes, where a semi-commercial property includes a residential element, its rental income can often support some or all of the mortgage.
Some lenders may even base affordability solely on the residential income if it is enough to cover the mortgage on its own.
What is meant by 'common sense lending'?
It refers to lenders who assess an application on its genuine merits, rather than applying rigid, one-size-fits-all criteria.
This approach can be particularly valuable for owner-occupier or mixed-use purchases that do not fit a standard lending template.
Can I buy the premises my business already trades from?
Yes, this is a common scenario, particularly when a landlord decides to sell.
An established trading history at the same premises can work strongly in your favour, since it gives the lender direct evidence the business already performs well there.
Commercial Finance Network is a whole-of-market FCA authorised commercial finance broker working with property investors, developers, and businesses across the UK and internationally. We work across the full specialist commercial mortgage panel and will tell you which lenders will engage with your deal, what LTV and rate to expect, and how to structure the application before anything is submitted.
Commercial Finance Network is directly authorised and regulated by the Financial Conduct Authority. Your property may be repossessed if you do not keep up repayments on a loan secured against it. Commercial and business-purpose lending secured against investment property is not regulated by the Financial Conduct Authority.
Call us on +44 1494 622 111 or email info@cfnuk.com to speak to a specialist directly.
Related Pages
- Commercial Mortgages – whole-of-market advice for commercial property purchases
- Semi-Commercial Mortgages – financing for mixed commercial and residential use properties
- Owner-Occupied Commercial Mortgages – financing for businesses buying the premises they trade from
- Commercial Mortgage Calculator – estimate affordability and stress-tested borrowing