Trading Business Mortgages London
Pubs, hotels, care homes, dental practices, MOT garages, day nurseries and serviced accommodation. Operational property where value is bound up with the business that runs from it. EBITDA-led underwriting plus sector overlays: CQC, Ofsted, DVSA, NHS UDA, barrelage. Loan-to-value 60 to 70%, interest rates 7.0 to 9.0% pa, 15 to 25 year repayment terms. Limited company structures supported.
LTV
60 to 70%
Rate
7.0 to 9.0% pa
Term
15 to 25 years
Facility
£250K to £10M
What is a sector-specialist commercial mortgage?
Trading-business mortgages fund operational commercial property where the value is bound up with the business that runs from it. Unlike pure investment property, where the test is rent against mortgage cost, trading-business mortgages test EBITDA cover: the trading profit of the business covering the mortgage repayment, typically at 1.5x to 2.0x cover. Goodwill, brand, sector regulation and going-concern value all influence the lend.
Underwriting is sector-specific and depends entirely on the property type. Pubs: barrelage, EBITDA, beer-tie status, licence type and trading record. Hotels: occupancy, average daily rate, RevPAR, brand affiliation and location. Care homes: CQC rating, occupancy, weighted-average bed value and the mix of council against private fees. Dental practices: NHS UDA contract value, private fee mix, principal against associate structure and surgery count. MOT and petrol: DVSA authorisation, turnover and contamination survey on the site. Day nurseries: Ofsted rating, registered places, occupancy and fee structure.
Loan-to-value runs 60 to 70%, lower than pure investment because the asset value is sector-locked and harder to repurpose if the business fails. Term 15 to 25 years, interest rates 7.0 to 9.0% pa reflecting the specialist underwrite. London complicates the valuation more than most markets, because the bricks-and-mortar value under a trading business is often high enough to pull against the trading value. A Zone 2 pub with modest barrelage can be worth considerably more as an alternative-use building than as a going concern, and lenders read that in opposite directions: some treat it as downside protection and some treat it as an incentive problem. Knowing which desk reads it which way is the difference between a three-week answer and a three-month one.
Most trading-business mortgages are taken out by a limited company trading entity with a personal guarantee from the operating principal, and they fall outside the Financial Conduct Authority's regulated mortgage perimeter because they finance business premises rather than residential property. We do not hold FCA authorisation because the products we arrange are unregulated. Stamp duty land tax on a trading-business purchase follows commercial rates, and where a deal is structured as a share purchase of an existing operating limited company rather than an asset purchase, SDLT can be deferred or partly avoided. We work alongside your tax adviser on the structure before submission. Refinancing an existing trading-business mortgage off a maturing five-year fix is a frequent reason to re-engage.
Steps from sector review to specialist credit committee
1. Sector and trading review
Two years of accounts, current management figures and sector-specific data: CQC for care, Ofsted for nursery, DVSA for MOT, occupancy and ADR for hotel, barrelage for pub.
2. Specialist lender shortlist
Sector dictates lender. Care: Shawbrook, Cambridge and Counties, Hampshire Trust. Licensed trade: Cynergy Bank. Dental and medical: Allica, Hampshire Trust.
3. Indicative terms in 48 hours
Interest rate, loan-to-value, EBITDA cover requirement, repayment term and fees, from a clean enquiry only.
4. Sector-specific credit pack
CQC inspection report for care, Ofsted report for nursery, NHS UDA contract for dental, licence and barrelage for pub. A cleaner pack means faster credit.
5. Specialist RICS valuation
A sector-accredited RICS valuer instructed by the lender, typically 3 to 5 weeks. In London the valuer will usually comment on alternative-use value as well as trading value.
6. Credit approval and completion
Specialist desks underwrite more slowly than mainstream commercial. Allow 6 to 10 weeks total from indicative terms to drawdown.
Operator profiles routing through this product
- Pub and bar operators across the West End, Shoreditch, Bankside and the borough high streets
- Hotel, guest house and serviced-apartment operators across central and outer London
- Care home operators in the outer boroughs where site values support the bed count
- Dental, GP and veterinary practice principals buying single sites or small groups
- MOT garage and petrol forecourt owners on the arterial routes and North Circular corridor
- Day nursery operators across the family-heavy inner-suburban boroughs
- Independent restaurant and gastropub operators buying their freehold
- Gym, studio and leisure operators acquiring the premises they occupy
Sub-sector clusters and lender behaviour across the capital
London carries the largest concentration of trading-business commercial mortgage flow in the UK, which follows from an economy of £617.9 billion in GDP and more than 85% of its 4.7 million-strong labour force working in service industries. The licensed trade is the most visible sub-sector, running from the West End and Mayfair through Shoreditch and Bankside to the neighbourhood pubs of Greenwich and Wandsworth, and Cynergy Bank is among the more consistent desks on it. Care home lending concentrates in the outer boroughs, where site values and bed counts work together rather than against each other, with Shawbrook, Cambridge and Counties and Hampshire Trust holding significant London books. Dental and medical practices sit across every borough, with Allica and Hampshire Trust the most consistent quoting desks. MOT and garage deals cluster on the arterial routes and price through Together, with environmental due diligence as the extra underwriting step. Hotel and serviced-accommodation lending is its own market here, driven by a visitor economy no other UK city comes close to. The recurring London theme across all of it: alternative-use value under the trading business, which we address in the credit narrative rather than leaving the valuer to raise it.
Trading-Business Mortgage FAQs
Other Commercial Mortgage Services
Exploring Trading-Business Mortgage for your London property?
Free-of-charge scheme assessment. Indicative terms within 48 hours.