Commercial property lending follows its own rules. The LTVs are lower, the rates are higher, the underwriting is more complex, and the range of lenders is narrower. But for established businesses paying significant rent, the numbers often stack up in favour of buying.\n\nWhat Counts as Commercial — Offices, retail units, warehouses, industrial units, pubs, restaurants, care homes, surgeries, and mixed-use properties (such as a flat above a shop). If the primary purpose is business rather than residential, it falls under commercial lending.\n\nTypical Terms — Loan-to-value: 60–75% (occasionally 80% for strong applications). Interest rates: typically 2–4% above base rate, so roughly 6–8% in early 2025. Terms: usually 15 to 25 years, with rates often reviewed every 3 to 5 years. Arrangement fees: 1–2% of the loan.\n\nHow Lenders Assess Applications — Unlike residential mortgages, commercial lenders focus heavily on the business itself. They want to see at least two to three years of profitable trading accounts. They assess debt service coverage, meaning your business income must comfortably cover the mortgage payments after other costs. A ratio of 1.5 times is typical. The property itself is also scrutinised for its resaleability, condition, and tenant covenant if let.\n\nLenders to Consider — The high-street banks (Lloyds, NatWest, Barclays, HSBC, Santander) all have commercial divisions. Specialist lenders include Shawbrook, Aldermore, United Trust Bank, Together Money, and Cambridge and Counties Bank. For very small loans (under 50,000), Funding Circle and Iwoca offer unsecured business loans as an alternative.\n\nOwner-Occupied vs Investment — If your business occupies the property, most lenders assess affordability based on business accounts. If you are buying a commercial property as an investment (to let to tenants), the rental income becomes the primary assessment factor. Investment commercial mortgages typically require the rent to cover 125–150% of the mortgage payments.\n\nPension-Led Funding — A less well-known option: your Self-Invested Personal Pension (SIPP) or Small Self-Administered Scheme (SSAS) can buy commercial property. Your business then pays rent to your pension fund, which is a tax-deductible expense. The rent grows your pension tax-free. This does not work for residential property, only commercial.