Commercial property funding
Expert advice on securing finance for commercial property
Commercial property funding solicitors
Securing funding against your commercial property could be a good option if you’re looking to expand or take advantage of new economic opportunities.
Our expert team of solicitors can help you with securing funding against your property for, amongst other things, the following:
• Expansion plans for your business
• Improvements to your commercial property
• Changing lenders and re-mortgaging
• Purchasing industrial plant and machinery
• Investing in other commercial property
The funding process
While the process of securing funding will be different for everyone, here is how we usually work:
- We ask that you first approach your chosen bank to agree the principles of any funding
- Once you have an approved lending agreement, we can give you a realistic estimate of how long it will take for funds to be made available to you
- We will ensure that you are kept up to date at every stage of the process
- Our costs will be dependent on the amount that you are borrowing and the complexity of the lending agreement
- We will give you a realistic estimate at the beginning of the process so that you can budget accordingly
When is commercial property finance used?
Commercial property finance is often used to purchase new business space such as warehouses, retail units and office buildings, and is a great option if you want to grow your business but can’t afford to do so outright.
Commercial property finance can also be used to refurbish or develop an existing commercial property.
What type of funding/finance should I use for my commercial property?
There are several options for funding the purchase of commercial property including:
- Commercial mortgage – a loan used to buy or refinance a property used for business purposes.
- Bridging finance – a short term loan used to bridge funding gaps before finding a long-term solution. Usually used to secure commercial property quickly or buy a property at auction. See our Bridging Finance page for more detail.
- Asset-based lending – a loan secured by an asset (such as machinery or the property you intend to buy) which is used as collateral to guarantee the loan’s repayment
- Sale and leaseback – you sell a commercial property you own and occupy from a buyer and lease it back from them
- Private equity – securing investment from private individuals or firms who in return get a percentage share in the equity of the property.
Our experienced team are available to connect you with regulated financial professionals for further advice.
Should I buy commercial property as a sole trader or under a limited liability company?
If you purchase commercial property as a sole trader, you’re personally responsible for all the liabilities and debts of your business. This means if the business fails you could lose your personal assets to pay back the outstanding loan.
Whilst there are extra costs involved in setting up as a limited liability company, as a limited company is a separate legal entity from its owners, your personal assets will not be at risk if the business fails.
Do I need a personal guarantee to fund a commercial property?
If you run a small business or a new business that doesn’t have a strong financial record, then you will most likely need a personal guarantee. This means that if you default on the loan, the guarantee provides an additional source of repayment.
You should consider the implications of a personal guarantee before agreeing to one. You will be personally responsible for paying back any outstanding debt and you could be putting your personal assets at risk.
However, there are steps you can take to reduce the risk to you, which we can help with. For example, you could take out personal guarantee insurance or director’s or officer’s liability insurance. You should also carefully review the terms of the guarantee and find out if you can negotiate the terms with the lender to release the personal liability.
We'll get to know your business so we can tailor funding advice to your unique situation.
