A **commercial mortgage for a limited company** is a loan used by a trading business to buy or refinance its own premises, secured by a first legal charge over the property. The company (rather than the directors personally) is the borrower, and the property typically houses the business that generates the income to service the debt.
This guide is specifically about **operating limited companies**, manufacturers, hospitality businesses, professional firms, healthcare providers, retailers and trading groups borrowing against the premises they occupy. If your goal is investment property held in a property-only vehicle, read our companion guide on [SPV and limited company commercial mortgages](/knowledge-hub/spv-limited-company-commercial-mortgages) instead.
What Is a Commercial Mortgage for a Limited Company?
A **commercial mortgage is a loan** advanced to a corporate borrower, secured against **commercial property** used wholly or mainly for business purposes. For a trading limited company, the property is usually the **business premises** the company already trades from, or premises it is buying to relocate or expand into.
The key distinguishing features when the borrower is a trading limited company rather than an individual or an SPV are:
- The lender underwrites two things at once: the company's trading performance and the value of the property
- The mortgage typically uses an owner-occupied lending policy rather than an investment policy
- Affordability is assessed against EBITDA and operating cash flow, not just rental income
- Personal guarantees from directors are almost always required
- The company's bankers, accountants and audited accounts all come under scrutiny
These loans typically run for 15 to 25 years on a capital and interest **repayment** basis, with **fixed interest** options of 2, 3 or 5 years sitting on top of a longer underlying term. Some lenders will also write interest-only periods for the first 1 to 3 years to ease cash flow during a relocation.
How a Trading-Company Mortgage Differs from an SPV Mortgage
Lenders treat operating-business borrowing very differently to property-only SPV borrowing. Understanding the contrast helps you approach the right lender first time.
| Feature | Trading Limited Company | Property SPV |
|---|---|---|
| Primary income source | Trading profits / EBITDA | Rental income from tenants |
| Underwriting focus | Business performance + property | Property cash flow + sponsor |
| Affordability metric | Interest cover from EBITDA (typically 1.5x-2.0x) | DSCR from rent (typically 1.25x-1.45x) |
| Loan term | 15-25 years, often amortising | 5-25 years, often interest-only |
| Maximum LTV | 70-75% (sometimes 80% prime) | 60-75% |
| Lender pool | High street + challenger + specialist | Challenger + specialist dominant |
| Personal guarantees | Almost always required from directors | Required from significant shareholders |
Because the property and the income that services the loan come from the same business, **lenders** view a well-run trading company occupying its own premises as a strong proposition. High street banks like **Lloyds Bank**, **NatWest**, **Barclays** and **HSBC** retain a meaningful appetite here, alongside challengers such as **Allica Bank**, **Aldermore**, **Shawbrook** and **Hampshire Trust Bank**.
Eligibility: Can a Limited Company Get a Commercial Mortgage?
**Eligibility** for a limited company commercial mortgage rests on four pillars: the company, the directors, the property and the deal structure. Most established UK trading companies will satisfy the basic criteria provided the numbers stack up.
Typical lending criteria across mainstream lenders:
- UK-registered limited company or plc, trading for at least 2 years (some specialists accept 12 months)
- 2-3 years of filed accounts showing profitability or a clear, evidenced trajectory
- Strong credit rating for both the company and all directors with 20%+ shareholding
- The property must be used wholly or mainly by the company (owner-occupier policy) or have a viable letting plan
- Sufficient deposit, typically 25-40% of the purchase price
- Demonstrable interest cover from sustainable trading profits
You will **need to provide** the following documentation alongside your application:
- 2-3 years of statutory accounts plus latest management accounts (no more than 3 months old)
- 6-12 months of business bank statements across all trading accounts
- Personal SA302s and tax overviews for each director
- A current asset and liability statement for guarantors
- A business plan covering the use of the premises and growth plans
- Details of existing borrowing and any other security in place
Where the company is younger, has had a difficult trading year, or operates in a sector with volatile cash flow, expect to use a challenger or specialist lender rather than a high street bank.
Can a New Limited Company Get a Commercial Mortgage?
A newly incorporated trading company with no filed accounts can still obtain a commercial mortgage, but the route is narrower. Lenders compensate for the lack of trading history by relying more heavily on:
- The directors' personal experience in the same sector
- Personal net worth and asset backing of the guarantors
- Forward-looking financial projections supported by contracts or pipeline
- A lower LTV, often capped at 60-65% rather than 75%
- In some cases, a parent company guarantee where the new entity is a subsidiary
Challenger banks like **Allica Bank**, **Hampshire Trust Bank** and **Recognise Bank** are typically more receptive to newer companies than the high street.
Group Structures, Subsidiaries and Parent Guarantees
Many trading businesses sit inside a group, an operating company with a holding parent, or a parent with several trading subsidiaries. Lenders see this structure regularly and have well-established approaches.
Borrowing in the OpCo vs the PropCo
If the trading group already separates property ownership (PropCo) from trading activity (OpCo), the PropCo will normally be the legal borrower. The OpCo is then the tenant on an intercompany lease, and rental flow from OpCo to PropCo services the mortgage. Lenders will typically require:
- A formal intercompany lease at market rent
- A parent company guarantee or cross-guarantee from the OpCo
- Sight of consolidated group accounts
- Comfort that the wider group can support the debt if trading dips
Cross-Guarantees and Debentures
Where a group of trading subsidiaries shares banking facilities, lenders may take debentures over multiple entities and cross-guarantees between them. This widens the security pool but also means weakness in one subsidiary can affect the others. It is a structure worth modelling carefully with your accountant.
Intercompany Loans
Lenders will scrutinise material intercompany loan balances. Director loans, dividends and intercompany positions need to be transparent, documented and ideally cleared down where possible before applying.
In my time at Lloyds and Bank of Scotland, the deals that stalled in credit were almost always the ones where the group structure or intercompany flows were unclear. Spending a week with your accountant to produce a clean group structure chart before applying is one of the highest-return preparation steps you can take.
Interest Rates and Costs in 2026
The Bank of England **base rate** sits at 4.50% in early 2026, having eased from its 5.25% peak. Commercial mortgage **interest rates** for limited company borrowers currently sit in the following ranges:
| Lender Type | Indicative Rate | Max LTV | Typical Use |
|---|---|---|---|
| High street (Lloyds, NatWest, Barclays, HSBC) | 5.75% - 7.50% | 65-70% | Established trading businesses, £500k+ loans |
| Challenger (Allica, Aldermore, Shawbrook, HTB) | 6.50% - 8.50% | 70-75% | Mid-market trading companies, faster execution |
| Specialist (Together, UTB, Interbay) | 7.50% - 10.00% | Up to 75% | Complex deals, lighter accounts, unusual property |
| Private (Coutts, Arbuthnot Latham) | 5.50% - 7.50% | Bespoke | High net worth directors, broader relationship |
Fixed and variable products are both common:
- Fixed rate products of 2, 3 or 5 years protect cash flow during the introductory period
- Variable rate and base-rate tracker products allow you to benefit if the base rate falls further
- Some lenders offer a capital repayment holiday of 6-12 months at the start of the loan to bridge a relocation or fit-out period
- Early repayment charges typically apply during any fixed period, often on a tapering scale
Upfront costs to budget for:
- Arrangement fee: 1-2% of the loan, often added to the loan
- Valuation: £1,500-£5,000 depending on property size and complexity
- Legal fees: £2,000-£6,000+ combined (your solicitor plus the lender's)
- Broker fee, where applicable
- Environmental and structural surveys for industrial or older properties
Use our [commercial mortgage calculator](/calculators/commercial-mortgage) to model **monthly repayments** at different rate and term combinations.
What the Money Can Be Used For
A commercial mortgage to a limited company can fund a range of business property objectives:
- Purchasing the premises you currently occupy from a landlord
- Buying a new owner-occupied site to relocate the business
- Refinancing existing business premises onto better terms or to release equity
- Acquiring a second site for expansion or a satellite operation
- Buying out a co-owner of premises held jointly with a former business partner
- Funding a major fit-out or extension where capital works increase value
Where part of the property is also **residential property** (for example, a retail unit with a flat above), the loan is typically structured as a semi-commercial mortgage rather than a pure commercial product, and **conditions apply** around minimum commercial floor area.
The Application Process
A typical commercial mortgage application from initial conversation to completion takes 8-14 weeks for a high street lender, and 4-8 weeks with a challenger.
- Initial assessment, A specialist broker reviews your numbers, premises, structure and objectives, and identifies the realistic lender pool
- Heads of terms, Selected lenders issue indicative terms covering rate, LTV, fees and key conditions
- Formal application, Full submission with company accounts, management accounts, business plan and director documents
- Valuation and surveys, RICS valuation, plus environmental or structural reports as required
- Credit approval, Lender's credit committee issues a formal offer
- Legal completion, Solicitors complete property due diligence, security documents and personal guarantees
- Drawdown, Funds released to your solicitor for the property purchase or refinance
The biggest variable is how clean and complete your initial information pack is. A well-prepared file with current management accounts, a clear group structure chart and proper financial projections typically halves the time to credit approval.
Risks and Regulatory Position
Commercial lending to limited companies is generally **unregulated** by the Financial Conduct Authority because the borrower is a company rather than an individual consumer. There is no Mortgage Conduct of Business sourcebook protection, and the loan is offered **subject to status** and lender credit policy.
Directors should be aware that:
- Personal guarantees mean your home or other personal assets may be repossessed if the loan defaults and the property security is insufficient
- The property securing the loan may be repossessed if the company does not keep up payments
- Cross-guarantees within a group expose otherwise healthy subsidiaries to weakness in one part of the business
- Refinancing risk at the end of any fixed period needs to be planned for
The lender will assign a relationship manager once the loan is drawn, but the depth of that relationship varies. High street banks tend to have dedicated **relationship managers** for SME and corporate clients, while some specialist lenders are more transactional.
How to Strengthen Your Application
From the credit-team side of the desk, the applications that get the cleanest terms are the ones that anticipate the lender's questions. Practical steps that make a measurable difference:
- File your accounts on time, every year, with no qualifications
- Reconcile management accounts to the last set of statutory accounts cleanly
- Clear director loan balances or document them properly
- Maintain visible cash reserves in the business bank account
- Tidy up the group structure chart and intercompany positions before applying
- Provide a realistic, evidenced 3-year forecast with sensitivities
- Use a specialist broker who can match the deal to the right lender first time
For more on application preparation, see our guide to [improving your commercial mortgage application](/knowledge-hub/improve-commercial-mortgage-application).
Working with Commercial Mortgages Broker
We arrange commercial mortgages for trading limited companies across every sector, from £250,000 owner-occupier purchases through to £25m+ group refinances. Our ex-banking background means we understand exactly how lender credit teams will read your accounts, your structure and your sector, and we package each deal accordingly.
[Contact our team](/contact) for a no-obligation conversation about your company's commercial mortgage requirements.
*Written by Matt Lenzie, Founder of Commercial Mortgages Broker. Ex-Lloyds Bank & Bank of Scotland.*