Commercial mortgages with bad credit, thin accounts or a new business
A decline from your bank is not the end of the market. Challenger and specialist lenders exist precisely for cases the high street will not take. Here is what is possible, what it costs, and how to present it.
Credit history
- Minor blips (a late payment, a satisfied default over two years old): most challenger lenders will proceed at normal or near-normal pricing with an explanation.
- CCJs and defaults in the last two years: specialist lenders, higher rate, lower LTV (60% to 65%), a written explanation, and evidence it is resolved.
- Bankruptcy or liquidation: possible after discharge, usually with three years' clean history since, at specialist pricing.
- HMRC arrears or a Time to Pay arrangement: a red flag for most lenders; clear it or agree a plan before applying.
Thin or poor accounts
- One year's accounts: several challenger lenders will lend on one year plus forecasts and management accounts.
- A loss-making year: explain it (a one-off, a bad debt, investment in growth) and show the recovery in management accounts.
- Profits that do not cover the loan: add back what is legitimate (the rent you will stop paying, directors' pension contributions, one-off costs), extend the term, put down more, or offer additional security.
New businesses
Lenders want to see relevant experience (you ran a similar business, or managed one), a proper business plan with forecasts an accountant has looked at, a bigger deposit (35% to 40%), and personal financial strength. Buying an existing trading business with its accounts is much easier to finance than a start-up.
How to present a weak case
- Lead with the explanation, not the excuse. One paragraph: what happened, what you did, why it will not recur.
- Evidence everything: satisfied CCJ certificate, HMRC clearance, management accounts, order book.
- Increase the deposit or offer other security.
- Accept a shorter fixed term at specialist pricing with a plan to refinance to a cheaper lender in two years.
- Use an adviser who does this regularly; they know which lender will take what.
What it costs
Expect 1 to 3 points above standard pricing and 5% to 10% less LTV. On a £250,000 loan, two extra points is about £5,000 a year: real money, but often less than the cost of not buying.
A note on the numbers. Rates, loan-to-value limits, fees and criteria are typical figures at the time of writing (2026). Commercial lending is priced case by case, so your own terms depend on the property, the business, the tenant and you. This is information, not advice, and not an offer of finance.
Quick answers
Will applying to several lenders hurt my credit?
Indicative terms need no credit search. A full application usually does. An adviser gets terms informally first, so only one hard search is made.
My bank declined me. Does that go on record?
Not on your credit file. Other lenders will ask whether you have been declined and why; answer honestly with the explanation ready.
Ready to talk to someone who can actually arrange it?
Tell us about the property and the business, and a commercial finance adviser will come back with which lenders fit, what rate to expect and what they'll want to see. No fee for the conversation, no obligation.