What is Commercial Finance?

Commercial finance is a lending agreement between a business, and a lender, to support business activity or expenditure.

Many commercial finance cases are turned down by traditional lenders, due to the complexity of the case and strict lending criteria. At Crystal Specialist finance, we’re committed to helping brokers complete cases with ease. We have great relationships with lenders on panel who offer flexible criteria. They will consider almost any applicant, from clients who are currently renting their business premises but want to buy, to those who want to raise capital through refinancing.  

How does Commercial Finance work?

Commercial finance provides businesses with the capital they need to grow, acquire assets or manage cash flow. The process typically begins with assessing the client’s financial position, funding requirements and the purpose of the finance.

Lenders will evaluate commercial mortgage applications by reviewing key factors, including credit history, business performance, security offered and the ability to repay the loan.

Commercial Finance – Key Aspects

Understanding the different product options available and how they apply to your client’s circumstances is key to making informed decisions.

Property Related Purchases

Businesses that rent their premises but want to buy

Businesses that own their premises and want to raise capital through refinancing

Property investors looking to purchase and let out commercial properties

Portfolio landlords looking to expand or change a premises

Non-property Related Purchases

Asset Finance – To acquire vehicles, machinery or equipment without large upfront costs. The business pays for the asset over time through options like hire purchase or leasing. This type of finance can preserve cash flow. At the end of the term, the asset can often be owned, returned or upgraded.

Invoice Finance – This type of finance releases cash tied up in unpaid invoices. It can improve cash flow and helps businesses to manage long term payment terms and maintain steady operations.

Pros & Cons of Commercial Finance

If your client is considering commercial finance, it is important to assess the pros and cons carefully, to ensure it’s the most suitable funding option for their business needs.

Pros

• Improved cash flow – Providing your clients with immediate access to capital without draining business reserves.

• Supports growth – It can allow your clients to invest in new equipment, properties, or expansion plans.

• Flexible options – Asset finance, invoice finance and commercial mortgages can be tailored to specific business needs.

• Preserves ownership – Helping businesses to retain full control, rather than giving up equity.

Cons

• Risk of security – Some facilities require assets or property as collateral, which could be at risk if repayments are missed.

• Potential for over-leverage – Taking on too much can increase your client’s financial pressure and limit flexibility in the long term.

• Commitment to repayments – Fixed repayment schedules can strain cash flow during slower trading periods.

Commercial Finance Property Types

While criteria will differ between lenders, we can offer LTVs up to 80% on commercial finance. The following are examples of property types that a commercial mortgage may be suitable for.

• Shops & Retail

• Factories

• Warehouses

• Offices

• Restaurants & Pubs

• Hotels

• Semi-commercial units

Commercial Finance Eligibility Checks

Eligibility checks will differ depending on the lender. However, most lenders will assess the following:

• Cash flow

• Outstanding debt

• Ability to pay the deposit and loan repayments

• Projected business income

• Last 3 months business statements

• Proof of ID (certified copy of passport or driving licence)

Key considerations before taking out a Commercial Mortgage

Before your clients take out a commercial mortgage, it is important they understand the financial, legal and operational responsibilities involved.

Financial needs – Your clients must determine the specific purpose for the funding, whether it’s for expansion, equipment purchases, or managing cash flow.

Credit history – It is important to understand the factors that lenders consider when assessing creditworthiness, such as your client’s business accounts and credit score. Affordability assessments will differ depending on the lender. As a specialist we work with lenders who will consider adverse credit, arrears and CCJs.

Future plans – Your clients should consider their long-term goals to ensure the mortgage structure supports their plans.

Commercial Finance Scenario

We specialise in securing commercial mortgages and can provide solutions where others can’t.

Here’s just one example…

A broker approached us to secure a commercial loan for their client, a sole trader relocating to a larger industrial unit with a tight four-month deadline. We sourced a tailored solution from a lender offering the full loan amount. Securing the funds in just 3 months rather than the anticipated 4 allowed the client to relocate even sooner!

Click here to view the full case study.

For more commercial finance case study examples, click here.

How specialist lenders can help

At Crystal Specialist Finance, we simplify the complex when it comes to completing commercial finance cases. With access to specialist lenders offering flexible criteria, our expert team work to ensure cases are structured tailored to your clients needs.

You can package a case with us, where you will keep all client contact, or refer the case and we will deal with your client directly. Whichever route you choose, you will earn up to 50% of the procuration fee upon completion. That’s £2,500 based on an average commercial mortgage of £286,000.

If you have a case in mind, or are interested in how we can help, call our New Business Advisers on 01827 37710. Alternatively, you can submit an application online in under 10 minutes via our secure CrystalHUB. Track a case as it progresses on the CrystalHUB dashboard and save yourself time whilst earning commission.

If you’d prefer to send us an email, you can do so at enquiries@crystalsf.com.

Commercial Finance FAQs

What rates are available with commercial mortgages?

At Crystal Specialist Finance, we work with lenders who offer various rate options. Get in touch and we can provide a tailored quote based on your clients’ circumstances.

How much money can be borrowed with a commercial mortgage?

Loan sizes typically start from £25,000. Repayment terms are usually up to 25 years. At Crystal, we can offer LTVs up to 80%, however this will vary depending on the lender.

How long does commercial finance take to complete?

This will vary depending on the lender, client circumstances and other parties involved. On average, our turnaround time for a commercial loan is 10-12 weeks from initial enquiry.

Can your client get commercial finance if they are self-employed?

Yes! As a specialist, Crystal offers solutions for self-employed clients, business owners and those with complex income structures.

What commercial finance applicants will you consider?

At Crystal Specialist Finance, we work with many specialist lenders who offer flexible criteria. We will consider applicants with complex income structures, foreign nationals, limited companies and more. Get in touch for a tailored quote based on your clients’ circumstances.

What security is required for a commercial mortgage?

Many commercial finance products require collateral, such as property, machinery or other business assets. The type of security will depend on the lender and the loan size.

What fees and charges should your clients expect with their commercial mortgage?

There are various fees involved with a commercial mortgage, including:

• Application fee

• Valuation fee

• Arrangement fee

• Legal fees

• Administration fees