Yes, you can get a **commercial mortgage with bad credit** in the UK, but expect higher interest rates, lower LTV, and a smaller pool of lenders willing to consider your application. The good news is that a **bad credit commercial mortgage** is far more achievable than most worried borrowers think, particularly when the underlying property and **financial situation** of the business are strong.
Can You Get a Commercial Mortgage with Bad Credit?
The short answer is yes. Unlike residential lending, **commercial mortgage** decisions are not driven purely by a borrower's **credit score**. Commercial lenders weigh the **property value**, rental income, business trading performance, and exit strategy alongside any **adverse credit** history. **Bad credit may** narrow your choices but it rarely closes the door entirely.
The lender you approach matters more than almost anything else. High street banks have strict scorecards and tend to decline anything with significant **credit issues**. **Specialist lender** options, by contrast, are built around **borrowers with bad credit** and assess applications case by case. You may be able to **get a mortgage** that high street lenders would never touch, and a good **commercial mortgage broker** knows exactly which **lenders who are best placed** to help your specific profile and find you the **best deal** on the market.
How Bad Credit Affects a Commercial Mortgage Application
Lenders assess **bad credit commercial** applications by looking at three things: what the credit issue was, how recent it is, and whether it has been resolved. A discharged bankruptcy from 2018 is treated very differently to an unsatisfied **county court** judgment from last month.
Expect three concrete impacts on your **mortgage application**:
- Higher interest rates, typically 2-3% above clean-credit equivalents (so 8.50%-12.00%+ vs 5.75%-7.50% standard)
- Lower loan to value, often capped at 60-65% rather than the standard 75%
- Larger arrangement fees, frequently 2-3% of the loan amount
A CCJ from four years ago that has been settled is very different from a CCJ this year that is still outstanding. The first might cost you 0.5% on rate; the second might mean a specialist lender only.
Types of Bad Credit Lenders Consider
Lenders categorise **credit histories** by severity. The table below shows how a typical **commercial mortgage lender** maps each **type of bad credit** to a likely lender tier and rate uplift over clean-credit pricing.
| Credit issue | Likely lender tier | Rate uplift |
|---|---|---|
| Missed payments (1-2, historic) | Challenger bank | +0.25%-0.75% |
| Single CCJ, settled, 2+ years old | Challenger bank | +0.50%-1.00% |
| Multiple CCJs or defaults (recent) | Specialist | +1.50%-2.50% |
| IVA (active or recently completed) | Specialist | +2.00%-3.00% |
| Discharged bankruptcy (3+ years) | Specialist | +2.00%-3.00% |
| Discharged bankruptcy (under 3 years) | Specialist or bridging | +3.00%+ |
| Repossession history | Bridging / private | Case-by-case |
Lenders will also consider whether your **poor credit history** is a one-off event (a divorce, illness, failed business venture) or a pattern. A single event with a clear story usually attracts much better terms than ongoing **debt** problems.
How Long Credit Events Affect Applications
Credit events stay on your **credit report** for six years from the date they were registered, but their impact on a **commercial mortgage** application fades much faster. Most **mortgage lenders** weight recent events heavily and discount older ones.
| Credit event | Heavy impact | Moderate impact | Minimal impact |
|---|---|---|---|
| Missed payment | 0-12 months | 1-2 years | 2+ years |
| CCJ (settled) | 0-12 months | 1-3 years | 3+ years |
| Default | 0-2 years | 2-4 years | 4+ years |
| IVA | During + 1 year after | 1-3 years post | 3+ years post |
| Bankruptcy | 0-3 years post-discharge | 3-6 years | 6+ years |
This is why time is one of your best allies. If you can wait six to twelve months and use that time to strengthen your file, the lender pool widens significantly and your rate drops.
Which Lenders Consider Commercial Mortgages with Bad Credit?
The UK **mortgage market** for adverse credit splits into four lender groups. Understanding **which lenders are available** to your specific profile is the difference between an approval and a wasted application.
High Street Banks (Clean Credit Only)
[Lloyds Bank](/lenders/lloyds-bank), [NatWest](/lenders/natwest), [Barclays](/lenders/barclays) and [HSBC](/lenders/hsbc) sit at the top of the **traditional lenders** market. They offer the lowest rates but will decline almost any application with meaningful adverse credit. A single satisfied default from years ago may pass; anything more is usually a decline.
Challenger Banks (Minor or Historic Credit Issues)
[Aldermore](/lenders/aldermore), [Shawbrook](/lenders/shawbrook), [Allica Bank](/lenders/allica-bank), [Hampshire Trust Bank](/lenders/hampshire-trust-bank), [Atom Bank](/lenders/atom-bank), [Redwood Bank](/lenders/redwood-bank) and [Recognise Bank](/lenders/recognise-bank) take a more pragmatic view. They will typically consider:
- Settled CCJs over two years old
- Historic missed payments with a clear explanation
- Light adverse credit where the underlying business is profitable
- Borrowers with a strong financial situation despite past issues
Specialist Lenders (Serious Adverse Credit)
This is where most **bad credit commercial mortgages** are placed. Specialists like Together, UTB, [Kent Reliance](/lenders/kent-reliance) (OneSavings Bank), [LendInvest](/lenders/lendinvest), [Interbay Commercial](/lenders/interbay-commercial) and [Paragon Bank](/lenders/paragon-bank) actively underwrite recent CCJs, defaults, IVAs, and discharged bankruptcy.
Private Banks (High Net Worth Only)
Coutts, Arbuthnot Latham and Hampden & Co will sometimes look past credit issues for clients with substantial assets under management. This route is only realistic with investable wealth typically above £1m.
What Rates and Fees Should You Expect?
As of mid-2026, the Bank of England base rate is 4.50% and standard **commercial mortgage** **interest rates** sit between 5.75% and 10.00%. **Adverse credit** pricing runs 2-3% higher.
| Profile | Indicative rate | Max LTV | Arrangement fee |
|---|---|---|---|
| Clean credit, strong covenant | 5.75%-7.00% | 75% | 1.0%-1.5% |
| Light adverse, historic | 7.00%-8.50% | 70% | 1.5%-2.0% |
| Recent CCJs / defaults | 8.50%-10.50% | 65% | 2.0%-2.5% |
| IVA / discharged bankruptcy | 10.00%-12.00%+ | 60% | 2.0%-3.0% |
A **bad credit commercial** deal also tends to carry higher valuation and legal fees because specialist underwriting takes longer. Use our [commercial mortgage calculator](/calculators/commercial-mortgage) to model the all-in cost.
Bridging as a Faster Route for Credit-Impaired Borrowers
If you cannot wait the 8-12 weeks a **specialist commercial mortgage** typically takes, [commercial bridging](/services/commercial-bridging) is often easier to arrange with **bad credit**. Bridging lenders focus on the asset and exit strategy, not your **credit profile**. Rates run 0.55%-1.25% per month with completion in 5-14 working days. For **business owners** who need to act fast, bridging often works as a stepping stone, take the bridge now, **improve your credit** over 12-18 months, then **refinance** onto cheaper **commercial finance**.
How to Improve Your Chances of Approval
Whether you have time to wait or not, these are the steps that move the needle with **specialist bad credit commercial mortgage** underwriters.
- Pull your credit report from all three agencies (Experian, Equifax, TransUnion) and check for errors. Around one in five reports contain mistakes that can be fixed quickly.
- Settle outstanding CCJs and defaults where possible. An unsatisfied CCJ is far more damaging than a satisfied one.
- Reduce credit card balances to under 30% of available limits to lift your credit score before you apply.
- Increase your deposit. Moving from 75% to 60% LTV often unlocks lenders that would otherwise decline.
- Document your story. A clear written explanation of what caused the credit issues and what has changed makes underwriters far more willing to consider your application.
- Show strong recent trading. Two years of profitable accounts can offset a lot of historic adverse credit.
- Use a specialist commercial mortgage broker. The right mortgage broker will know which commercial lenders to approach first and how to package your file.
If you are 12 months from being ready, do not waste a hard credit search on a high street bank today. Apply when your file is strong, not when you are hoping for a miracle.
Refinancing a Commercial Mortgage with Bad Credit
Many of our enquiries are from **business owners** who took out an expensive **bad credit** facility 18-24 months ago and want to **refinance** onto better terms. If your credit has improved and your **commercial property** has held or grown in value, refinancing can save tens of thousands over the loan term.
The **refinance** process is the same as a purchase application, with the added benefit that lenders can see your repayment track record on the existing facility. Twelve to twenty-four clean months of repayments on a current **commercial finance** facility is one of the most powerful pieces of evidence in your favour.
How a Specialist Broker Helps
The difference between a placed deal and a decline often comes down to which lender sees your file first. As a [commercial mortgage broker](/services/commercial-mortgages), we know which **credit mortgage lenders** to approach for each **type of bad credit** and how to negotiate **rates and fees** that reflect your actual risk rather than a worst-case scorecard.
Commercial mortgages on non-residential property are not regulated by the **Financial Conduct Authority**. For mixed-use property where you live in part of the building, regulated rules apply and your **home may be repossessed** if you do not keep up **repayments on a mortgage**.
If you have **bad credit** and need a **commercial mortgage**, [get in touch](/contact) for a no-obligation conversation. We will tell you honestly whether you can get a deal today, what rate to expect, and whether waiting six months would materially improve your terms.
*Written by Matt Lenzie, Founder of Commercial Mortgages Broker. Ex-Lloyds Bank & Bank of Scotland.*