Owner-occupier
Owner-occupier commercial mortgages
Buying the premises your business trades from, underwritten on your accounts rather than on a tenant's rent.
What it is
The lender is underwriting the business, not just the building.
Brief: explain that owner-occupier lending is affordability-led — the lender is testing whether trading profit services the debt — and how that changes the documentation required.
[DRAFT] Explain the difference between investment lending (rent covers debt) and owner-occupier lending (trading profit covers debt).
[DRAFT] Cover adjusted EBITDA, add-backs, directors' remuneration and how a lender rebuilds your profit figure.
[DRAFT] Explain the buy-versus-rent comparison most business owners are actually making, and the pension and asset arguments around holding the property in a SIPP or SSAS.
Use cases
Who this is for.
Brief: name real sectors from the client book.
Buying out a landlord
[DRAFT] Purchasing the freehold of premises you already occupy under lease.
Trade counters and workshops
[DRAFT] Light industrial premises for established trading businesses.
Professional practices
[DRAFT] Dental, veterinary, accountancy and legal practices where goodwill forms part of the value.
Hospitality premises
[DRAFT] Pubs, restaurants and hotels underwritten on trading accounts.
Pension purchases
[DRAFT] Buying through a SIPP or SSAS with the business paying rent to the scheme.
Expansion into a second site
[DRAFT] Funding a second premises while continuing to trade from the first.
Key criteria
What lenders want to see.
Brief: confirm LTV bands and cover ratios; note where a government guarantee scheme changes the answer.
| Measure | Typical requirement |
|---|---|
| Maximum LTV | [DRAFT] Up to 70% – 75% |
| Trading history | [DRAFT] Two to three years of filed accounts |
| Debt service cover | [DRAFT] 125% – 150% of stressed payment |
| Term length | [DRAFT] 5 – 25 years |
| Repayment basis | [DRAFT] Usually capital and interest |
| Security | [DRAFT] First charge plus debenture and personal guarantees |
Management accounts and a short business plan usually matter more than the last set of filed accounts.
Go deeper
Read with the commercial mortgage guide.
[DRAFT] Short paragraph linking to the main commercial mortgage page and the affordability calculator so a business owner can test the numbers first.
Questions
The things people ask first.
Thinking about buying rather than renting?
[DRAFT] One line asking for two years of accounts and the asking price to get an affordability view back.
Same working day response.