So, you’re looking for commercial property to rent in the UK? And you’re feeling ready to embark on your search for the ideal business space? Don’t jump into the process just yet – prepare your finances before you do anything.
Start by organising your finances to determine what you can realistically afford. This will help you avoid taking on a commercial property that could jeopardise your business with unmanageable costs. You might realise that you need financial support to help you secure and pay for your property
It’s critical that you choose a financing option that aligns best with your situation. We recommend that you take time to evaluate your financial position, the risks, and long-term goals before deciding on a financing option.
To get you started, below, we’ve written about five common options for SME commercial property financing.
1. Business loans for leasing
Entrepreneurs can secure a general business loan for commercial property from traditional high street banks or alternative SME lenders (e.g. Aldermore Bank, Capify, Funding Circle and Paragon Bank). The loan will cover upfront costs and lease deposits for commercial rental properties in the UK. These loans can help you manage cash flow by spreading repayments over time.
2. Bridging loans
These are short-term financing solutions used to quickly secure a property, often when awaiting the arrangement of long-term financing or the sale of another property. Bridging loans for business properties are typically more expensive than standard mortgages but are useful for immediate funding needs.
3. Equity investors
If you’re happy to hand over a share of your business to an investor then it’s worth exploring this option. SMEs can partner with equity investors for small business properties. However, you’ll need to invest time in developing an excellent investment pitch and look for investors. With that in mind, this might be a longer term goal if you want to move property any time soon.
4. Government schemes
Various government loans or grants for SME rented properties may be available, particularly for SMEs involved in redevelopment or those meeting specific criteria. These schemes can offer favorable terms and support for SMEs looking to invest in commercial properties. Find out more on the Gov.uk website, local councils, Growth Hubs, Chambers of Commerce and industry organisations.
5. Leasehold improvement loans
Once you’ve secured a lease on a property you might need additional funding for upgrades or other changes. These loans are offered by banks or alternative lenders, and are tailored for renovations or fit outs for leased properties.
Each financing option has its advantages and considerations. We advise speaking to financial advisors or commercial estate agents to determine the most suitable method for your business’s specific circumstances. Or you can contact us and we’ll do our best to help: info@propertyadviceservices.co.uk
