How to get a commercial property loan: application steps and documents

Write a one-page brief describing what you are buying, its intended use, purchase price, location, proposed completion date and borrowing amount. Include whether the property is freehold or leasehold, currently occupied or vacant, and whether alterations are planned.

Name the proposed borrower and explain how it will receive the cash used to make repayments. Buying premises for your trading business and buying a building to rent to another business raise different questions. Resolving that distinction early makes lender conversations more useful.

Work backwards from cash available rather than the maximum advertised borrowing. Separate the deposit, professional costs, applicable purchase taxes, repairs and the reserve the business must retain after completion. Identify any deposit money provided by directors, another company or separate borrowing and disclose its source.

In a hypothetical £500,000 purchase with a £350,000 mortgage, £150,000 must come from other funds before fees and works. If £150,000 is all the cash available, the transaction is not yet fully funded. Write down which costs can be paid without weakening day-to-day operations.

Prepare a downside budget as well as your expected case. For a trading property, examine a fall in operating cash generation. For an investment, examine void periods and maintenance. A manageable opening payment can become difficult when several assumptions change together.

Ask your shortlisted provider for its exact document list. NatWest's application guidance asks for business information including turnover and profit details. Do not assume that one provider's checklist or trading-history requirement applies across the market.

A useful preparation folder should allow the lender to follow the money from past performance to future repayments. Where records are incomplete or a business is new, explain the gap and ask what substitute evidence the lender would consider before paying for reports.

Ask a lender or broker what is still provisional in an indicative quotation. Record the proposed amount, rate basis, repayment schedule, security, fees and conditions. If using a broker, ask which lenders are being considered and how the broker is paid.

Submit accurate information consistently. A forecast is more useful when assumptions can be explained than when it simply reaches the repayment figure. If a lender raises a concern, establish whether it relates to affordability, property acceptability, evidence or the proposed structure before changing the application.

A lender's valuation supports its lending decision; it is not a substitute for your own assessment of the building or a survey appropriate to the purchase. Ask what happens to the approved borrowing if the valuation is below your agreed price.

Have your solicitor explain the security documents, title issues, lease restrictions, guarantee wording and any conditions that must be met. For company charges, Companies House guidance sets a 21-day registration period starting the day after creation. Agree who handles the filing and confirms it has been completed.

Before exchanging contracts, establish with your solicitor whether funding and the transaction conditions are sufficiently settled. Avoid treating an informal lending conversation as a binding offer.

Keep a completion statement showing funds in, deposit, loan proceeds and every payment out. Confirm insurance, the first repayment date and where repayments will be collected. Put information obligations and future rate or facility review dates in the business diary.

Then compare actual occupancy and borrowing costs with your budget. If repairs or trading results change the cash position, discuss the issue early. Completing the purchase is the start of managing the loan, rather than the end of the financial decision.