What is property finance?
Property finance is a broad term for any lending product used to purchase, develop, refinance or release equity from commercial or residential property. For UK businesses, it covers everything from long-term commercial mortgages to short-term bridging loans that complete in days rather than months. The right structure depends on the property type, your planned use and how quickly you need the funds. Fundably’s flagship property finance lenders include Barclays for commercial mortgages and Lendco for bridging and specialist short-term lending, alongside OakNorth Bank and dedicated development finance providers from our 50+ lender panel.
Whether you are buying your first trading premises, converting a disused office block into flats or refinancing an existing portfolio, Fundably matches you with specialist property lenders in a single application so you can compare terms and move quickly.
How does property finance work?
At its core, property finance works like any secured loan. The property (or land) acts as security for the lender, and you repay the borrowed amount plus interest over an agreed period. Because real estate provides strong collateral, loan-to-value (LTV) ratios can be generous, often up to 70% to 75% for commercial mortgages and higher for residential development with planning permission in place.
The general process follows these steps:
- Define the project. Clarify whether you are purchasing, developing, refinancing or releasing equity.
- Prepare key documents. Lenders typically need management accounts, cash flow projections, details of the property and (for development) a build cost schedule.
- Apply and compare offers. Using Fundably as a commercial finance broker lets you reach multiple lenders at once rather than approaching each one separately.
- Receive a decision in principle. For bridging loans this can happen within 24 hours. Commercial mortgages usually take a few days.
- Complete valuation and legal work. The lender instructs a surveyor and solicitors. Timescales vary from a week (bridging) to several weeks (commercial mortgage).
- Draw down funds. For standard purchases, funds are released on completion. For development finance, they are drawn in stages as the build progresses.
What types of property finance are available in the UK?
Commercial mortgages. Long-term loans (typically 15 to 25 years) used to buy or refinance commercial premises such as offices, retail units, warehouses and industrial estates. Rates can be fixed or variable, and most lenders offer repayment or interest-only options. Owner-occupied and investment properties are both eligible, though lenders assess them differently.
Development finance. Short-term, project-specific lending for ground-up builds, conversions and major refurbishments. Funds are released in tranches tied to construction milestones, and interest is usually “rolled up” (added to the loan) so there are no monthly payments during the build. The loan is repaid when the completed units are sold or refinanced onto a longer-term product.
Bridging loans. Fast, flexible, short-term loans designed to “bridge” a gap in funding. Common scenarios include securing a property at auction before long-term finance is arranged, completing a purchase while waiting for another property to sell or funding light refurbishment before refinancing. Terms run from one to 24 months, with interest rates typically quoted monthly (often 0.4% to 1% per month).
Refinancing. If you already own commercial property, refinancing lets you switch to a better rate, extend your term or release equity locked in the asset. Released equity can fund further acquisitions, business expansion or working capital needs.
Who is property finance for?
Property finance is used by a wide range of borrowers across the UK:
- Owner-occupiers buying premises for their own business, such as a restaurant, dental practice or logistics company.
- Property developers undertaking conversions, new builds or refurbishments for resale or rental.
- Portfolio landlords and investors acquiring commercial, mixed-use or buy-to-let properties.
- Business owners releasing equity from property they already own, freeing capital for growth without selling.
Lenders assess applications based on the property value, rental yield or development appraisal, your experience (for development finance) and your wider financial position. Even if you have been turned down by a high-street bank, specialist lenders accessed through Fundably may still be able to help.
What are the key costs to consider?
Property finance costs extend beyond the headline interest rate. Make sure you budget for:
- Arrangement fees. Typically 1% to 2% of the loan amount, charged by the lender on completion.
- Valuation fees. The lender instructs a RICS-accredited surveyor. Fees depend on the property value and complexity.
- Legal fees. Both your solicitor and the lender’s solicitor will charge. For bridging loans, some lenders use a single solicitor to speed things up.
- Exit fees. Some bridging and development lenders charge an exit fee on repayment. Always check the offer terms.
- Broker or platform fees. Fundably does not charge businesses an upfront fee for arranging introductions to lenders.
All rates, fees and LTV figures shown are indicative only and subject to individual lender assessment. The terms your application receives will depend on the property type, your experience and the lender’s own criteria.
How much can you borrow?
Borrowing limits depend on the product and lender:
- Commercial mortgages: up to 75% LTV for owner-occupied; up to 70% LTV for investment properties. Minimum loan sizes are often around £50,000.
- Development finance: up to 70% of gross development value (GDV) and up to 90% of build costs when combined with mezzanine finance.
- Bridging loans: up to 75% LTV, with some lenders going higher for strong applications. Loans from £50,000 to several million pounds.
How Fundably helps you find the right property finance
Fundably gives you access to 50+ UK lenders through one short application, from high-street banks like Barclays to specialist bridging providers like Lendco and alternative development finance funds. As a commercial finance broker and NACFB member, we analyse your project details and match you with the lenders most likely to offer competitive terms for your specific deal.
The initial matching uses a soft credit check, which does not affect your credit score and is not visible to other lenders. A hard credit check only happens if you choose to proceed with a specific lender’s offer. This saves considerable time compared with approaching lenders individually, and it means you are less likely to miss a product that fits your circumstances.
Ready to finance your next property project?
From commercial purchases and portfolio refinances to ground-up developments and auction completions, the right property finance structure can make or break a deal. Apply through Fundably in around five minutes and receive instant, tailored lender matches for your project.