Most business owners who come to us about a BTL mortgage for a trading company have already been told it cannot be done. That is not quite right — but it is fair to say the market is narrow, the criteria are more demanding than for a standard buy to let mortgage, and the wrong application to the wrong lender wastes time and leaves footprints on your credit file.

This article deals specifically with the mortgage side of the transaction — how to get a buy to let mortgage approved when your limited company is an active trading business. If you are looking at how to set up a trading company structure for property investment more broadly, we cover that separately in our guide to BTL trading company setup.

What is a BTL Mortgage for a Trading Company?

A BTL mortgage for a trading company is a buy to let mortgage taken out in the name of an existing limited company that carries out normal commercial activity — a dental practice, a construction firm, an IT consultancy, a logistics business, or any other active trade.

This is fundamentally different from the standard route for limited company landlords, which involves a Special Purpose Vehicle (SPV) — a company registered at Companies House solely to hold investment property, typically with SIC code 68209 (other letting and operating of own or leased real estate).

Your trading company will have SIC codes reflecting what it actually does — whether that is engineering, retail, professional services or anything else. That distinction is one of the most significant factors lenders consider when assessing your application.

Trading Company vs SPV — The Key Differences

Before deciding whether to proceed with your trading company or set up a separate SPV, it is important to understand how lenders view both structures. The table below shows the practical differences across the factors that matter most to an underwriter.

Deposit and LTV Requirements

For a BTL mortgage for a trading company, you should plan for a minimum deposit of 25% of the property value, giving a maximum loan to valueThe ratio of the mortgage amount to the value of the propert... of 75%. This applies regardless of whether you are purchasing a new property or remortgaging one already owned by the company.

Some lenders may require a higher deposit depending on:

• The financial complexity of the trading company
• The nature of the business and its SIC codes
• The company’s existing liabilities and creditor position
• The directors’ personal credit histories
• The property type — standard residential lets are easier to place than HMOs or mixed-use

If the property is already owned by the company and is unencumbered — perhaps a former trading premises or land purchased with surplus profits — the deposit requirement may be satisfied by the existing equityThe difference between the value of the property and the amo.... However, a formal valuation will still be required by the lender before any offer is issued.

Which Lenders Accept Trading Company BTL Applications?

This is where the market becomes genuinely narrow. The majority of buy to let lenders in the UK — including most high street banks — only accept SPV limited company applications. For a trading company, you are working with a small number of specialist lenders who are willing to assess the case on its individual merits.

The number of lenders available to trading companies is substantially smaller than the 50-plus lenders accessible for standard SPV applications. This is not a reason to assume the mortgage is impossible — it is a reason to make sure you are working with a broker who has direct relationships with those specialist lenders and understands which ones are most likely to accept your specific type of business.

Going directly to a mainstream lender without specialist broker guidance is one of the most common and costly mistakes in this market. A declined application leaves a credit search record and delays the process significantly.

Personal Guarantees and Debentures

Almost all lenders who accept trading company BTL mortgages will require personal guarantees from the directors and significant shareholders. A personal guarantee means that if the company defaultsMissed payments on credit accounts, which can affect a borro... on the mortgage, the guarantors become personally liable for the debt. This is a significant commitment that should be reviewed carefully with your solicitor before you sign.

Some lenders may also require a debenture over the trading company. A debenture gives the lender a registered charge over the company’s assets — including equipment, stock, receivables and other property — in the event of default. This is more far-reaching than a personal guarantee alone and can affect how the company operates and its ability to raise other finance in future.

Not every lender requires a debenture. Part of what a specialist broker does is identify lenders whose security requirements are proportionate to the transaction and whose terms do not create unnecessary long-term restrictions on your business.

Tax Considerations for Trading Companies

The mortgage application and the tax structuring are two separate decisions, but they inform each other. Before committing to a trading company BTL mortgage, your accountant needs to be involved.

Mortgage Interest Deductibility

One of the key advantages of holding buy to let property in a limited company — whether an SPV or a trading company — is that mortgage interest remains fully deductible against rental profits. This is in contrast to individual landlords, who have faced restrictions on mortgage interest relief since 2017 under Section 24 of the Finance Act 2015.

Corporation Tax on Rental Profits

Rental profits within a limited company are subject to corporation tax rather than income tax. For the 2025/26 and 2026/27 tax years, the rates confirmed by HMRC are:

• 19% — small profits rate for profits up to £50,000
• 25% — main rate for profits over £250,000
• Marginal relief applies for profits between £50,000 and £250,000

Using Surplus Company Profits as a Deposit

The most common reason business owners want to use their trading company for a BTL mortgage is to deploy surplus profits sitting in the company without triggering a personal tax charge. Rather than drawing funds as dividends or salary — both of which create personal tax liabilities — the money can be used directly within the company structure as a deposit on an investment property. Your accountant should confirm whether this is more efficient than extracting and reinvesting personally, as this depends entirely on your individual circumstances.

What Lenders Assess on a Trading Company BTL Application

When a lender reviews a trading company BTL application, the underwriting process is more detailed than for a standard SPV case. The following areas are typically reviewed:

• Company accounts — usually the last two to three years, to assess financial stability and profitability
• SIC codes — your codes reflect your actual trade; lenders who accept trading company cases understand this, though some are more comfortable with certain industries than others
• Directors and shareholders — personal credit searches and proof of income may be required alongside company-level information
• Company liabilities — outstanding creditors, existing borrowing, debentures or charges already registered against the company
• Rental income coverage — the expected rent must meet the lender’s stress test, typically 125% to 145% of the monthly mortgage payment
• Property type — standard residential properties are the most straightforward; HMOs and mixed-use properties reduce the available lender pool further

The Application Process Step by Step

Common Mistakes to Avoid

Going directly to a mainstream lender. Most mainstream BTL lenders do not accept trading company applications. Approaching them without broker guidance wastes time and creates unnecessary credit search records on both the company and its directors.

Not involving your accountant before choosing the structure. The decision between using your trading company, setting up a new SPV, or buying personally depends heavily on your tax position, the amount involved and your longer-term plans. A mortgage broker cannot give tax advice — that conversation needs to happen with your accountant first.

Changing your company’s SIC codes to match property codes. Some business owners consider registering additional SIC codes such as 68209 to make their company look more like an SPV. This can cause confusion for lenders, complications with HMRC and problems with your business bank account. Lenders who accept trading company applications do not require you to change your SIC codes — and those who require 68209 will not accept a trading company regardless of what codes you add.

Underestimating the deposit requirement. The 25% minimum deposit for trading company cases is higher than many business owners expect. The funds must be available within the company without compromising its day-to-day operations.

Not planning for personal guarantee requirements. A personal guarantee is a significant personal financial commitment. Understanding the full extent of that liability before you sign is essential — not something to review after the offer has been issued.

Frequently Asked Questions