Property finance
Property Finance for UK Limited Companies
Property finance is borrowing for a property purpose: buying premises for your business, investing in property to let, funding a build or conversion, or covering a short gap while a sale or longer-term finance comes through. The right type depends on what your company is doing with the property, and how the finance will end.
This guide explains the main types of property finance for UK limited companies, how they differ, and what lenders generally look at.
Wize Finance can help your limited company see which types of property finance may suit what you’re planning, before you approach a lender.
Tell us about the property, the amount and how it will be used. The team reviews your enquiry and discusses the property finance routes that may fit.
What property finance covers
Property finance is a family of borrowing that is tied to a property and its purpose. The property is usually central to the lender’s decision and to its security. There are four main types:
- Long-term
Long-term borrowing to buy or refinance commercial premises, whether your company trades from them or lets them to business tenants.
- Long-term
Long-term borrowing for residential property your company owns to let, from a single buy-to-let to a portfolio.
- Short-term
Short-term borrowing secured on property, to cover a gap until a sale or longer-term finance.
- Short-term
Funding for building, converting or substantially reworking property, usually released in stages.
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What this section doesn’t cover: Mortgages or bridging loans secured on a home that you or your family live in are a different, regulated kind of lending, and Wize Finance doesn’t arrange them. The same goes for residential mortgages for individuals.
Which type of property finance fits what you’re doing?
- Situation 1:
Buying premises to trade from
Sounds like you if… Your company wants to own the building it works from.
Where to look A commercial mortgage. Owner-occupied commercial mortgages have their own guide.
- Situation 2:
Buying commercial property to let
Sounds like you if… Your company is buying a shop, office or unit to let to a business tenant.
Where to look A commercial mortgage, assessed partly on the lease and the rent.
- Situation 3:
Investing in homes to let
Sounds like you if… Your company or SPV owns, or is buying, residential property to let.
Where to look Property investment finance.
- Situation 4:
Covering a short gap
Sounds like you if… You need to complete before a sale or longer-term finance is in place.
Where to look Bridging finance.
- Situation 5:
Buying at auction
Sounds like you if… You’ve bid on, or plan to bid on, a lot with a fixed completion deadline.
Where to look Bridging is often used for auction purchases. Auction finance has its own guide.
- Situation 6:
Building or converting
Sounds like you if… You’re building from the ground up, converting a building, or carrying out major structural work.
Where to look Development finance.
- Situation 7:
Refinancing property you already own
Sounds like you if… You want to replace an existing property loan, or release money from a property.
Where to look A commercial mortgage or property investment finance for the long term, or bridging for a short gap.
- Situation 8:
Raising money for the business against property
Sounds like you if… The money is for the business, not the property.
Where to look Secured Business Loans may be the better place to start.
Short-term or long-term, and how it ends
The most useful first question isn’t “which lender?” but “how long do I need the money, and how will it be repaid?”
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Short-term property finance
- Bridging finance
- Development finance
How it usually ends
- Sale
- Longer-term finance
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Long-term property finance
- Commercial mortgages
- Property investment finance
How it usually ends
- Repaid over the term
Short-term and long-term property finance compared
Short-term property finance
- Types
- Short-term property finance Bridging finance, development finance
- What it’s for
- Short-term property finance A gap, a project or a time-limited opportunity
- How it usually ends
- Short-term property finance With an exit: the property is sold, or the borrowing is replaced with longer-term finance
- What lenders focus on
- Short-term property finance The plan, and how credible the exit is
Long-term property finance
- Types
- Long-term property finance Commercial mortgages, property investment finance
- What it’s for
- Long-term property finance Owning and holding property over the long term
- How it usually ends
- Long-term property finance Through regular repayments over the term, or refinancing at the end
- What lenders focus on
- Long-term property finance Affordability: trading income or rental income
Short-term property finance depends on a credible exit.
Lenders usually want to see how the borrowing will be repaid, through a sale or longer-term finance. We can talk your exit plan through with you before you approach a lender.
What lenders generally look at on property finance
Lenders weigh these differently for each type of property finance, but most will look at some combination of:
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The property. Its value, condition, location, use and how easily it could be sold, usually confirmed by a valuation the lender instructs.
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The plan. What the money is for and, for short-term finance, how and when it will be repaid.
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The income. For long-term finance, whether trading income or rental income can support the repayments.
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The borrower. The company’s track record, its finances, and the experience of its directors, particularly for investment and development.
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Security and guarantees. Property finance is usually secured by a legal charge over the property. Some lenders may also ask directors for a personal guarantee, which is a separate commitment from the property charge.
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Costs on both sides. Valuation and legal work are part of most property finance, and the borrower usually pays for them. Ask for a full breakdown before you commit.
Property finance or a business loan?
It depends on what the money is for, not just on what secures it.
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If the money is for the property itself (buying it, building it, holding it to let, or covering a gap in a property transaction), property finance is designed around that.
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If the money is for the business (stock, staff, growth or cash flow) and property is simply the security, a secured business loan may fit better.
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If the requirement is large or mixed, Large Business Loans explains how bigger borrowing is usually approached.
Know what you're planning?
Tell us about the property and what your company wants to do, and see which types of finance may suit it.
How Wize Finance works
Wize Finance uses the information you give us to understand what your company is planning. Where appropriate, it introduces the business to a finance provider, and the provider assesses the application and makes the decision.
After you submit your details, the Wize Finance team reviews your enquiry and contacts you to discuss your funding needs and next steps. Where appropriate, your details can then be shared with a suitable funding provider.
For property finance, it helps to tell us:
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what the property is and how it will be used
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whether you’re buying, refinancing, building or bridging
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roughly how much you need, and for how long
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how the finance will be repaid or exited
Property finance FAQs
What is property finance?
Property finance is borrowing for a property purpose, such as buying commercial premises, investing in property to let, funding a development, or bridging a short gap. The property is usually central to the lender’s decision and its security.
What’s the difference between bridging finance and a commercial mortgage?
Bridging finance is short-term, and ends when the property is sold or the borrowing is replaced. A commercial mortgage is long-term, repaid over the term from trading or rental income. Bridging is often used until a longer-term mortgage is in place.
Should I use bridging or development finance?
It depends on the work. Bridging is usually used to buy property, or for lighter work that doesn’t change its structure or use. Development finance is designed for building, converting or major structural work, and is usually released in stages as the work progresses.
Can a limited company buy property with finance?
Yes. Many commercial mortgages, investment property loans and bridging loans are made to limited companies, including companies set up just to hold property. Lenders look at the company, the property and the people behind it.
How much deposit do I need?
It depends on the type of finance, the property, how it will be used, and the lender. Lenders usually expect the borrower to put some money in, and set their own limits.
What is an exit strategy?
It’s how a short-term loan will be repaid: usually by selling the property, or refinancing onto longer-term finance. Lenders of short-term property finance look closely at how credible the exit is.
Can I raise money for my business against property I own?
Possibly. If the money is for the business rather than the property, a secured business loan may be the closer fit. Our route map above shows where each situation usually leads.
Do you cover mortgages on my home?
No. Mortgages and bridging loans secured on a home you or your family live in are regulated differently, and Wize Finance doesn’t arrange them.
Ready to see what may fit your property plans?
You don’t need to know which lender — or even which type of finance — is right before you enquire. Tell us what you’re trying to achieve, and Wize Finance will review your circumstances, discuss the options with you and, where appropriate, connect you with a suitable funding provider.