Commercial mortgage process

The commercial mortgage application process

Commercial mortgages move at a different pace to residential ones, largely because underwriters are assessing a business or investment case as well as a property. Knowing the sequence of events helps you prepare documents early and avoid the delays that stretch a six-week process into three months.

Category: How it works

Product: Commercial Loans

Typical timescale: 6–10 weeks to completion
Typical LTV: Up to 75% depending on asset and covenant
Loan size range: £150k – £15m
Valuation type: Full RICS valuation in most cases

Initial terms and lender selection

The panel of lenders that will consider a deal varies enormously by sector — a retail unit with a strong covenant and a semi-derelict industrial site attract entirely different appetites. A broker matches the deal to lenders likely to say yes before a formal application is submitted, saving weeks of dead ends.

Application and financial information

Expect to provide two to three years of accounts, management information if the latest year-end is old, a business plan for owner-occupiers, or tenancy schedules and lease details for investment purchases.

Certified accounts or tax returns
Bank statements, typically 3-6 months
Tenancy schedule and lease copies for investment deals
Schedule of existing borrowing and assets

Valuation and underwriting

A RICS valuer inspects the property and reports on market value, condition and, for investment deals, rental value. Underwriters use this alongside the covenant assessment to size the final loan, which can differ from the initial indicative terms if the valuation or covenant review raises issues.

Legal work and completion

Solicitors handle title investigation, lease review where relevant, and drafting of the facility documentation. This stage often takes as long as underwriting itself, particularly where there are multiple charges, leases to review or planning conditions to satisfy.

Frequently asked

How long does a commercial mortgage take from start to finish?

Straightforward owner-occupier deals with clean accounts can complete in around six weeks. Investment purchases with complex leases or multiple tenants often take eight to ten weeks or longer.

Will the lender want to visit the property?

In most cases yes, via an instructed RICS valuer, though some lenders accept desktop valuations for lower-value or lower-risk transactions.

Can the loan amount change after the valuation?

Yes. If the valuation comes in below the purchase price or the surveyor flags condition issues, the lender may reduce the loan or request additional security or deposit.

Do I need a business plan?

For owner-occupier purchases, particularly newer businesses, yes. Established trading businesses with strong accounts may only need a brief narrative alongside their financial history.

What causes the most delay?

Slow provision of financial documents and legal enquiries around title or leases are the two most common causes of delay, both of which can be reduced by preparing everything before the application is submitted.

Get commercial mortgage terms started

Send us the property and business details and we'll identify the right lenders before you commit to a formal application.

Call 0345 2690628 Send your deal details