Commercial Mortgages for Contractors ,Built Around Your Business Potential
At Contractor Mortgage Solutions, we help contractors and self-employed professionals secure commercial mortgages without the hurdles of traditional lending. Whether you’re expanding your business premises, purchasing an investment property, or refinancing an existing asset, we work with specialist lenders who assess your borrowing power based on your contract income ,not just company accounts. With our expert guidance and access to exclusive rates, you can achieve your commercial goals with confidence and flexibility.
Estimate Your Commercial Borrowing Power
Use our commercial mortgage calculator to get an instant estimate of how much you could borrow based on your contract income and financial profile.
Please note that this tool provides an indication only ,for a fully tailored commercial mortgage assessment,
speak with one of our specialist advisers today.
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Please note, that this calculator only provides indications of possible borrowings.
Contact us for a free bespoke contractor mortgage recommendation.
What are Commercial Mortgages?
Commercial Mortgages are a specific type of loan designed for purchasing, refinancing, or re-mortgaging business premises or investment properties. They differ significantly from residential mortgages due to varying legal structures, assessment criteria, and lender requirements.
Unlike personal residential loans, Commercial Mortgages are tailored to the unique financial profile and operational needs of businesses, including those run by day rate contractors. They facilitate the acquisition of premises ranging from offices and warehouses to retail units and industrial spaces, or even specialist properties. Understanding these distinctions is crucial for successful property acquisition.
How Do Commercial Mortgages Work for UK Contractors?
What is the process of securing Commercial Mortgages as a contractor?
Securing Commercial Mortgages involves assessing your business’s financial health, the property’s value, and your personal credit standing. For contractors, traditional lenders often struggle with non-standard income assessments, creating unnecessary hurdles.
We streamline this process by leveraging your gross contract income, presenting a clear picture of your true earning potential to specialist lenders. This bespoke approach ensures lenders understand your financial stability, making the application process for Commercial Mortgages fairer and more efficient. Our expertise bridges the gap between contractor income and lender criteria.
What makes Commercial Mortgages different for contractors compared to traditional employees?
For contractors, the primary difference lies in how income is assessed. Standard mortgage providers often rely on PAYE or multiple years of tax returns, which don’t accurately reflect a contractor’s consistent, high day rate income. This can unfairly limit borrowing capacity.
As a specialist brokerage, we focus on your day rate contract income. We advocate for you, ensuring lenders understand the stability and earning power derived from your contracts, even without extensive tax return history. This expert approach helps overcome the industry bias often faced by self-employed professionals when seeking Commercial Mortgages.
What are the typical costs associated with Commercial Mortgages?
Beyond the interest rate, several costs are associated with securing Commercial Mortgages. These can include arrangement fees charged by lenders, valuation fees for property assessment, and legal fees for conveyancing.
Additionally, you may encounter broker fees (though some brokers are commission-based), survey costs, and potential early repayment charges. We provide a transparent breakdown of all anticipated costs upfront, ensuring you have a clear financial picture when pursuing Commercial Mortgages.
What are the main types of Commercial Mortgages available?
Commercial Mortgages are broadly categorised into two main types, each serving distinct business objectives. Understanding these is crucial for selecting the right finance solution for your property strategy.
Owner-Occupier Commercial Mortgages
These are for businesses purchasing a property they intend to occupy and operate from. This includes offices, shops, warehouses, or industrial units.
Commercial Investment Mortgages
Designed for purchasing property to rent out to other businesses, generating rental income. This category is ideal for expanding your property portfolio or diversifying investments.
Both types of Commercial Mortgages can be tailored to suit the specific needs of contractors and their businesses, whether establishing a new base or investing for future growth.
Navigating the Application Process for Commercial Mortgages
What are the steps in applying for Commercial Mortgages?
The application process for Commercial Mortgages is structured to ensure thorough due diligence by lenders. While comprehensive, our guidance simplifies each stage, providing clarity and confidence.
Initial Assessment: We evaluate your business needs, financial situation, and property requirements.
Lender Matching: We identify specialist lenders best suited to your profile as a contractor.
Documentation Gathering: Assistance in compiling all necessary financial and contractual evidence.
Application Submission: We submit your meticulously prepared application to chosen lenders.
Valuation & Due Diligence: Lenders conduct property valuations and financial checks.
Offer & Legal: Reviewing the mortgage offer and finalising legal aspects with solicitors.
Completion: Your Commercial Mortgages are funded, and property ownership is transferred.
We work with more than 120 mortgage lenders, including:
How long does it take to get approved for Commercial Mortgages?
The timeline for approval of Commercial Mortgages can vary significantly, typically ranging from a few weeks to several months. Factors influencing this include the complexity of your application, the lender’s processes, and the speed at which documentation is provided.
As your trusted guide, we proactively manage the process, ensuring all information is submitted efficiently and accurately. Our proactive communication with lenders helps to expedite decisions, making your journey to securing Commercial Mortgages as swift as possible.
Testimonials
What Our Clients Say
Priya K.
IT Contractor
I was hesitant about getting a mortgage as a limited company contractor. CMS simplified the process, explained all my options, and secured a deal that worked perfectly for me.
David M.
Engineering Consultant
Buying my first investment property seemed daunting. The team at CMS guided me based on my contract income, not just my accounts. The whole experience was transparent and professional.
Leah S.
Freelance Designer
CMS helped me consolidate my debts and expand my property portfolio. Their understanding of contractor finances is unmatched ,I finally felt supported by a lender who got my situation.
FAQs About Commercial Mortgages
What deposit is required for Commercial Mortgages?
Typically, lenders require a deposit of between 25% and 40% for Commercial Mortgages, although this can vary based on the property type, your business’s financial strength, and the specific lender. A larger deposit often leads to more favourable interest rates and terms, reducing your overall borrowing cost and demonstrating your commitment to the investment. We can help assess your deposit potential and guide you to lenders offering suitable options.
Our Partners: https://mortgage-tek.co.uk/
Can I get Commercial Mortgages with a new business or as a new contractor?
Yes, securing Commercial Mortgages with a new business or as a relatively new contractor is possible, though it can be more challenging with traditional lenders. Specialist lenders, however, are more open to assessing the potential of new ventures, especially when supported by a robust business plan and strong contract pipeline. Our expertise lies in identifying these niche lenders and presenting your case effectively, even without extensive trading history.
Do Commercial Mortgages require a personal guarantee?
Often, lenders for Commercial Mortgages will require a personal guarantee, especially for limited companies or smaller businesses. This means that if the business defaults on the loan, the individual providing the guarantee becomes personally liable for the debt. This is a common practice to mitigate risk for lenders. We will always ensure you fully understand the implications of any personal guarantees before committing.
Are Commercial Mortgages regulated by the FCA?
Commercial Mortgages are generally not regulated by the Financial Conduct Authority (FCA) in the same way residential mortgages are, particularly when the borrower is a business. This means fewer consumer protections apply. However, certain niche commercial loans, such as those to individuals or trusts for buy-to-let properties, may fall under some FCA regulations. We operate with full transparency and ethical standards, regardless of regulatory scope, always prioritizing your best interests.
Can I remortgage my commercial property?
Yes, remortgaging your commercial property is a common strategy to secure better interest rates, release equity for business expansion, or consolidate other debts. Similar to an initial purchase, the process involves assessing your current property’s value, your business’s financial standing, and finding a suitable lender. We can help you compare remortgage options for your Commercial Mortgages, ensuring you get the best terms available to support your business’s evolving needs.
How do lenders assess a contractor's income for Commercial Mortgages?
When assessing a contractor’s income for Commercial Mortgages, specialist lenders move beyond traditional P60s or tax returns. They primarily focus on your day rate, the length and stability of your current and previous contracts, and your professional experience. We articulate how your gross contract income demonstrates consistent, reliable earnings, challenging the standard industry bias and ensuring your true affordability is recognised for Commercial Mortgages.
Contractor Mortgage Solutions is an independent mortgage brokerage. Your home or property may be repossessed if you do not keep up repayments on your mortgage. The information provided on this page is for general guidance and informational purposes only, and does not constitute financial advice. We recommend seeking professional, personalised advice based on your individual circumstances.