Commercial Mortgage Brokers
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Author: Pete Mugleston - Mortgage Expert, MD
Updated: March 15, 2022
If you’re looking to secure a commercial mortgage for any purpose, an experienced broker offers the best route to finding a lender who can provide the borrowing you need.
In this article we’ll discuss the benefits of using a commercial mortgage broker, and why it’s important to choose one with specific experience securing finances for the type of premises or land you intend to purchase.
Once you’ve read through the information below, if you’d like to speak to a broker we work with, get in touch or give us a call on 0808 189 0463 and we’ll arrange for someone to contact you directly.
The following topics are covered below...
Using a commercial mortgage broker
People often mistakenly believe that all mortgage brokers offer the same services. In reality, however, there are many who specialise in particular aspects of the mortgage industry, including commercial finance.
Commercial mortgage advisors negotiate directly with lenders on behalf of their customers. They provide access to the whole market, including specialist providers not generally visible on the high street or internet and, therefore, only accessible via a broker.
Some can help to secure finance for a specific commercial property, whereas others may have expert knowledge in a particular type of industry, such as care homes, for example.
Finding a broker with experience that most closely matches your needs is highly recommended, as they offer invaluable additional benefits and knowledge in your chosen sector.
Unlike residential mortgages, which tend to have standard criteria, commercial finance is tailored to the individual applicant’s particular needs. So, for example, if you want a mortgage to buy a pub or a hotel, certain lenders will consider your application, whereas others won’t.
Given the scale of the commercial mortgage market, finding a lender who will accept your exact property, land purchase type or chosen sector can be difficult. Finding the right broker can significantly improve your chances of securing the finance you need.
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What to look for in a commercial broker
Aside from finding a commercial broker with experience and relevant sector knowledge, there are a number of other qualities that you should look for, to ensure you’re getting the highest level of service.
- Impartiality – An independent broker that has access to the entire market is most likely to be acting in your best interest, whereas those associated with just a few lenders won’t be able to provide you with a full picture of your options, and are more likely to be promoting lenders that pay them to do so
- Regulation – Most UK mortgage will support the National Association of Commercial Finance Brokers (NACFB), which is a trade body which promotes a certain standard and quality in the commercial lending market
- Transparency – Your broker should be able to explain exactly why the lender that they recommend offers you the most benefits, and/or potential for approval as well as the best interest rate and loan terms
What services will they provide?
As well as being an intermediary between yourself and the lender, a broker provides a number of invaluable services.
They can quickly compare the full market of commercial lenders, saving you considerable time and can also help with:
- The initial preparation in order to best meet the criteria of commercial lenders, to ensure that you are best placed to secure the lending you need
- Completion of your application, and review any supporting documents that you may need to provide, for example, a business plan, to ensure they add maximum value to your application
- Knowledge and foresight into any issues specific to commercial lending that may arise, and advice on how to overcome them
We work with a wide range of commercial brokers, all of whom are fully NACFB registered and offer impartial advice across the whole market of commercial lenders.
Get in touch on 0808 189 0463 or via this form to use our acclaimed mortgage broker matching services, and we’ll put you in touch with a broker with expert knowledge of securing finance for businesses in your sector.
Types of mortgages they can help with
There are two main types of commercial mortgage, owner-occupied and commercial investment, and a commercial broker can usually help you to secure either, although some will specialise in one or the other. They may also be able to help you to secure alternative forms of business finance, such as commercial bridging loans or development finance.
Whether you’re looking for an owner-occupier mortgage to purchase a property for your own business use, or an investment mortgage to buy commercial property to let out to other business owners, the type of business is a key factor.
Lenders often prefer to focus on specific trading premises, so a lender that would approve a retail purchase, may not necessarily consider a development land purchase, for example. This is where an experienced broker could step in, to guide you to those lenders who will be most comfortable with your business plan and purchase.
A commercial broker may also be able to help you to secure finance for a specialist buy-to-let purchase of a freehold block of flats to be individually let, or to refinance a large portfolio of residential properties.
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Access to lenders and rates
There are a wide range of lenders offering commercial mortgages, including high street banks, challenger banks, and more bespoke lenders. Many of the more specialist lenders are not accessible by the general public, so to increase your chance of attaining commercial finance, the services of a broker will be necessary.
Whilst high street lenders may offer preferential rates, the criteria are generally strict, and it’s difficult to find a LTV above 50%. If you require higher LTV borrowing, or there is less lender appetite for your business type, those specialist lenders who are only accessible via an intermediary offer you the greatest opportunity to secure a commercial mortgage.
Help with complex applications
In addition to brokers who specialise in specific industries, there are commercial brokers who are best placed to assist with more complex applications, including:
- Applicants who have been refused a commercial mortgage
- Applicants with bad credit
- Applicants that need 100% LTV (Loan to Value) mortgages
- Those with less industry experience, such as start-ups
If any of the above apply to you, it’s important that you highlight this when using our broker matching service, so we can ensure you are paired with the most appropriate advisor.
How much do commercial mortgage brokers charge?
Not all commercial brokers charge for their services, but the majority will charge a fee of around 1% of the value of the loan, for the arrangement of the mortgage, and the associated services they provide.
Fees are generally payable on successful application, so be cautious if they are requested at the beginning of the transaction, particularly if the fees are higher than the standard 1%. All of the brokers we work with are only payable on successful application, or will refund fees paid in advance, if the application is unsuccessful.
Efficient, approachable, capable
Presented a very competitive deal with the minimum of fuss after reviewing various alternatives. Made it easy to complete the procedures necessary to get the mortgage
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I was matched to such a great broker, Victoria was amazing! Thank you so much for everything!
Very professional and efficient…
Very professional and efficient service! Would definitely recommend.
Get matched with a commercial mortgage broker
Finding the right broker can be challenging, but we can do the hard work for you. The brokers we work with have access to the whole of the commercial lending market, and have strong working relationships with the lenders who are most likely to be able to help you.
As well as being NACFB registered, every broker that we work with has been accredited by our official LIBF (London Institute of Banking and Finance) scheme.
Our broker matching service can connect you with an expert who is best placed to secure the best deal.
There’s a reason our past clients have rated us 5 out of 5 on Feefo, so get in touch on 0808 189 0463 or via this form and we’ll begin the search immediately. We’ll put you in touch with the most appropriate broker for your circumstances in no time. All initial consultations are free, and you’re under no obligation.
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We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different types of commercial mortgages. Ask us a question and we'll get the best expert to help.
Mortgage Expert, MD
About the author
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!