Commercial Mortgage Pre Approval: What UK Business Owners Need to Know

For many business owners, purchasing a commercial property—whether it’s an office building, rental property, or retail unit—can be one of the biggest investments they will ever make. Before you jump into a commercial mortgage application process, getting a pre-approval (also known as a decision in principleA preliminary decision by a lender to offer a mortgage, base...) is a smart move.

This guide explains how commercial mortgage pre approval works, what lenders look for, and how to strengthen your application. Whether you’re a first-time buyer, a property developer, or looking to refinance your current premises, this article will help you make an informed decision.

The article is updated as of June 16,  2025

Risk Warnings:

The Financial Conduct Authority do not regulate commercial mortgages.

Commercial Mortgages by referral only.

Bridging loans are available through referral only

What Is a Commercial Mortgage Pre Approval?

A commercial mortgage pre approval is a lender’s early indication of what they may be willing to offer based on your financial standing, business accounts, and proposed property purchase. It’s not a binding contract, but it shows that you’re a potential buyer who meets their lending criteria.

This stage comes before the initial application and provides clarity on potential loan terms, repayment profile, and overall cost of capital. It’s often used by business owners who want quick access to commercial finance with predictable costs.

To check your borrowing capacity, many lenders offer tools like a commercial mortgage calculator – although working with an expert broker or finance solution provider often delivers a more accurate result.

Why Get Pre Approved?

There are several advantages to securing pre approval before submitting your full commercial mortgage application:

• Helps you budget more accurately by giving you a maximum loan amount
• Strengthens your position when negotiating with vendors or estate agents
• Helps identify the right type of mortgage, such as owner-occupied mortgages, commercial investment mortgages, or short-term loans
• Reduces the risk of surprises during the underwriting process

What Lenders Look For in Pre Approval

Commercial mortgage lenders review a range of factors to assess your suitability. These include:

1. Business Profile & Creditworthiness

Lenders will analyse your business type, financial statements, tax returns, and income sources. They also assess your credit history, credit rating, and business credit scores to evaluate the overall risk.

If you’re a sole trader, for example, you’ll need to provide proof of income, bank account details, and potentially a statement of assets or loss statements. For companies, lenders will also want to see company details and any guarantee of lending (if applicable).

2. Deposit and Security

Expect to put down a cash deposit, typically between 25–40% of the purchase price. Lenders may also require security property and apply a legal charge on the asset.

Other additional costs may include:

• Valuation fees
• Security fees
• Legal costs
• Early repayment charges

3. Type of Property

The type of loan you’re applying for depends on the real estate itself. Some lenders specialise in:

• Commercial property mortgages for business premises
• Investment mortgages for commercial premises or residential property let commercially
• Specialist finance products, such as mortgages for hotels, green assets, or ten-desk small offices

For support, some borrowers work with a commercial finance broker or a specialist lender like Clifton Private Finance, Allica Bank, or NatWest Bank. These brokers offer access to a wide range of mortgage products and understand the nuances of the commercial property finance market.

Documents You Will Need

To get pre approved, be ready to supply:

• Business accounts (2–3 years)
• Recent bank statementsA record of a borrower's financial transactions often requir...
• Proof of cash deposit
• Details of the security property
• A strong business plan and background on your investment experience
• Information on your repayment profile and potential mortgage payments

Your broker may also carry out a credit search and request documents related to your income requirements, legal representatives, and property valuation.

Choosing a Suitable Lender

The UK market includes a mix of mainstream lenders like high-street banks (e.g. Lloyds Bank Business Current Account) and private banks, as well as specialist teams focused solely on commercial mortgage loans.

A skilled commercial mortgage broker will review the type of lending requirement you have, assess your repayment terms (including options like balloon payments or capital repayment holidays), and match you to a suitable lender offering favourable terms.

This is particularly important in today’s competitive markets, where stricter lending criteria and market access can vary widely between institutions.

Application Process Overview

Step 1: Speak to a broker or adviser

Engage a dedicated team with extensive experience in the commercial mortgage market.

Step 2: Pre approval (decision in principle)

Submit your financial profiles, business plan, and property appraisal for early review.

Step 3: Full application

Your broker submits your mortgage application process along with supporting documents.

Step 4: Valuation and legal process

The property undergoes a valuation, and the legal process begins, including reviews of title, legal charge, and rental agreements if applicable.

Step 5: Mortgage offer and completion

Once approved, your lender issues an official mortgage deal, and funds are released upon completionThe point at which a property purchase is finalized and owne....

Fixed vs Variable Rates

You’ll also need to decide between fixed-rate mortgages and variable-rate mortgages. The best choice depends on your cash flow, personal finances, and whether you’re looking for stability or flexibility.

For specialist insight, consider working with an independent mortgage adviser or finance broker who can recommend the right type of mortgage rates for your business.

FAQs

How long does pre approval take?

Typically, between 2–5 working days, though it may take longer during public holidays or if your documentation is incomplete.

Can I get a commercial mortgage if I already own residential property?

Yes. Many business owners use their existing residential loans or real estate portfolio as leverage.

What if I’m buying a property for investment?

You’ll need to apply for a commercial investment mortgage. Lenders will focus on the rental income, investment returns, and your background experience.

Do lenders consider international clients?

Yes, although legal advice and careful planning are recommended to handle tax implications and currency risk.

Final Thoughts: Speak to a Commercial Mortgage Expert

Getting a commercial mortgage pre approval is more than just a box to tick—it’s a sign you’re financially prepared, credible, and ready to act. Whether you’re buying business property, investing in commercial premises, or refinancing your business loan, working with an experienced broker helps you access favourable terms and avoid costly delays.

For professional advice, visit NeedingAdvice.co.uk for support with independent financial advice, or speak with the team at RateSwitchRewards.co.uk about switching mortgage deals.

Looking for financial advice for women? Explore The Finance Woman for resources on female-focused retirement planning.