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How much deposit do you need for a commercial property mortgage?

The amount of deposit that you will need for a commercial mortgage will depend on a few factors such as the amount of borrowing you are looking to secure, the type of business and the lender you choose. Typically you can expect to need a deposit between 25% – 40%, but it could be higher or even lower if additional securities can be provided.

What factors could impact how much deposit you will need?

When calculating the affordability of a commercial mortgage, the lender will assess the strength of each application and will typically consider:

Modern commercial office building
  • The type of business that you have – for example companies such as restaurants or pubs may require a slightly bigger deposit compared to an office premise, due to the increased risk. 
  • Your industry experience – if you have a proven track record of working within that type of business this can help reduce the amount of deposit you will need.
  • Profitability – if the business is already trading with an accounting history this can help make the lender more comfortable with the lending. Alternatively if you can provide a comprehensive business plan with a clear strategy, this can massively support your application. 
  • Property type – the amount of deposit you will need will also depend on the type and construction of the property that you are looking to mortgage. For example, if the building is a non-standard construction, the lender may request a slightly higher deposit. 
  • The condition of the property – if the building will need significant renovation work to allow the business to trade, this can impact the risk and therefore the amount of deposit required. 
  • Loan-to-Value (LTV) – the lender will also take into consideration the amount that you are looking to borrow compared to the value of the property. 
  • Credit history – having a strong credit file can help support your application for a commercial mortgage and the amount of funding you are able to obtain. 

When enquiring for a commercial property mortgage, your dedicated broker will ask a few questions and take the time to understand your business, your plans moving forward and current financial situation in order to recommend the most suitable options for your particular circumstances.

With insights into the latest commercial finance criteria, they will be able to discuss what deposit you would need to provide to secure a commercial mortgage and which lenders could offer you affordable options with your preferred deposit in mind.

To get started you can talk to us by calling 01923 250090 or by getting in touch here to request a callback from one of our mortgage advisors.