Commercial Mortgages
Wellspring Capital acts as a commercial mortgage broker, advising property investors and trading businesses on lender selection, structure, and funding risk for commercial and mixed-use property across the UK.
When we’re typically involved
We’re often engaged early in a transaction — before valuation and legal costs are committed — to ensure lender appetite, structure and leverage align with the asset.
Commercial mortgages are commonly used by investors acquiring or refinancing:
- Mixed-use property (shops with flats above)
- Industrial units and warehouses
- Retail parades
- Offices
- Specialist assets such as pubs and leisure properties
Lenders assess commercial investment property primarily on rental income, location, and asset type. How that income is evidenced and presented often determines both leverage and pricing.
We work with investors ranging from first-time commercial buyers to experienced portfolio landlords operating through limited companies.
If you’re assessing a commercial or mixed-use transaction and want an early view on lender appetite and structure, we’re happy to help.
How commercial mortgage lenders assess applications
Although criteria vary, most decisions are driven by a small number of core factors.
Income and debt service coverage
Lenders typically require rental income to exceed loan repayments by a margin, commonly referred to as a debt service cover ratio (DSCR). This is often in the region of 125%–145%, though higher ratios may apply for specialist assets.
Income assessment depends on:
- Lease length and structure
- Tenant covenant strength
- Break clauses and rent reviews
- Whether income is commercial, residential, or blended
Property type and risk profile
Different assets attract different risk weightings. Industrial property is generally viewed more favourably than secondary retail, while specialist assets are assessed using more detailed criteria.
Loan-to-value (LTV)
Commercial mortgage leverage is typically lower than residential lending:
- 60–75% LTV is common for standard investment assets
- Higher leverage may be available where income quality justifies it
Borrower experience
While income is the primary driver, lenders also consider:
- Track record with similar assets
- Ownership structure (personal or limited company)
- Portfolio exposure
Typical commercial mortgage structures
- Loan type: Commercial term loan
- Term: 12–25 years
- Repayment: Interest-only or capital repayment
- Security: First legal charge over the property
- Personal guarantees: Common, though the scope varies
Terms are driven by risk and structure, not simply loan size.
Limited company commercial mortgages
Many commercial property investors purchase through SPVs or trading limited companies. Lenders typically assess:
- The property and income first
- Directors’ experience
- Guarantees and supporting security where required
Company ownership does not prevent access to competitive funding, but clarity of structure is critical.
Owner-occupied and trading business mortgages
Commercial mortgages are also used by trading businesses purchasing premises such as offices, warehouses, retail units, and hospitality property. In these cases, lenders assess both:
- The property
- The underlying business performance
Where early structuring adds the most value
The strongest commercial mortgage outcomes are typically achieved where the structure is aligned with lender criteria from the outset. Areas that benefit most from early review include:
- Lease structure and documentation
- EPC and compliance position
- Asset suitability relative to lender appetite
- Selection of an appropriate funding partner
Addressing these points early often leads to smoother credit approval and more consistent pricing.
How Wellspring Capital works
Wellspring Capital focuses on structuring and introducing commercial mortgage opportunities to appropriate funding partners. Our role is to assess feasibility early, align the opportunity with lender appetite, and present cases in a lender-ready format.
If you are assessing a commercial purchase or refinance and would value an initial view on structure and lender appetite, we are happy to review the position.
Commercial mortgage rates — what to expect
Commercial mortgage rates are priced differently to residential lending. Rather than being directly tied to the Bank of England base rate, most commercial lenders price on a margin above a reference rate — typically SONIA or base rate — with the margin reflecting the lender’s assessment of risk.
As a general guide for investment commercial mortgages:
- Rates typically range from around 1.9% to 7%+ above base, depending on asset type, LTV, and income quality
- Standard investment assets (industrial, offices, retail with strong covenants) tend to attract more competitive pricing
- Specialist assets such as pubs, leisure, or HMOs are priced at a premium to reflect lender risk appetite
- Arrangement fees are commonly 1–2% of the loan amount
Rate is rarely the most important factor in a commercial mortgage. Lender appetite for the asset, coverage requirements, and willingness to lend at the required LTV often matter more than the headline rate. We assess lender options on the full picture, not rate alone.
Frequently asked questions
What deposit do I need for a commercial mortgage?
Most commercial mortgage lenders require a minimum deposit of 25–40%, meaning maximum LTV is typically 60–75%. The amount required depends on the asset type, income quality, and lender. Some lenders may consider higher LTV where the income position is particularly strong or where additional security is available.
Can I get a commercial mortgage through a limited company?
Yes. Many commercial property investors purchase through SPVs or trading limited companies and this is well-supported by commercial lenders. Lenders assess the property and its income first, then consider the directors’ experience and ownership structure. Using a limited company does not typically restrict access to funding, though the documentation requirements differ from personal ownership.
How long does a commercial mortgage take to arrange?
Timescales vary depending on the lender, asset, and complexity of the case. A straightforward commercial investment mortgage with a mainstream lender can complete in 6–10 weeks from application. More complex cases — specialist assets, development exit, or cases requiring detailed credit underwriting — can take longer. Engaging a broker early and ensuring documentation is prepared in advance helps avoid unnecessary delays.
What is the minimum loan size for a commercial mortgage?
Most specialist commercial mortgage lenders have a minimum loan size of £50,000–£250,000. Some mainstream lenders will consider smaller loans, though product choice is more limited below this threshold. For larger loans above £1m, a wider range of specialist and institutional lenders becomes available.
Do I need a commercial mortgage broker?
Commercial mortgage lenders do not all operate through the same channels. Many specialist lenders are only accessible via introduced business from brokers. Beyond access, a broker with commercial lending experience can structure the case correctly from the outset, which directly affects lender appetite, leverage available, and speed of credit approval. Poorly presented applications are a common cause of declined or repriced deals.
What types of property can a commercial mortgage be used for?
Commercial mortgages can be used for a wide range of asset types, including retail units, offices, industrial and warehouse property, mixed-use buildings (such as shops with flats above), pubs and leisure properties, and HMOs or multi-unit freehold blocks. Each asset type is assessed differently by lenders, with mainstream assets typically attracting more competitive terms than specialist or vacant property.
Areas we cover
Wellspring Capital arranges commercial mortgages for investors and businesses across Greater Manchester and the wider North West. We work with clients throughout the region on a referred and direct basis.
If you are looking for a commercial mortgage broker in your area, we have dedicated pages covering:
- Commercial mortgage broker Manchester
- Commercial mortgage broker Bury
- Commercial mortgage broker Oldham
- Commercial mortgage broker Salford
If your location is not listed, please get in touch – we work with clients across the UK.
Most commercial mortgage lenders require a minimum deposit of 25–40%, meaning maximum LTV is typically 60–75%. The amount required depends on the asset type, income quality, and lender. Some lenders may consider higher LTV where the income position is particularly strong or where additional security is available.
Important note
Wellspring Capital is not authorised or regulated by the Financial Conduct Authority. We do not provide regulated mortgage advice. Our role is limited to commercial finance introductions and structuring support.