How do you finance a commercial property purchase?

• Posted onMarch 14, 2025

Investing in commercial property offers exciting new opportunities, whether you’re looking to expand your business or invest in a rental stream. However, financing a commercial property purchase can be complex and requires careful planning. However, WSP Solicitors are here to walk you through the key financing options and the crucial role solicitors play in ensuring a smooth transaction.

Remy Taylor Trainee Solicitor of our Commercial Property Department shares her insight on how to finance a commercial property.

When it comes to financing a commercial property purchase, there are several avenues to explore. The right option for you will depend on your financial situation and your long-term objectives. Here are the most common financing options:

Mortgages

The most widely used form of financing, commercial mortgages involve securing a loan against the property you’re purchasing. Institutional lenders (including high street banks) typically offer a range of terms and conditions depending on the property’s value and your financial standing.

Bridging loans

Bridging loans are short-term solutions, ideal for situations where immediate funding is needed before securing a more traditional long-term mortgage. These loans are often used by investors looking to purchase property quickly or to bridge the gap while waiting for other funds to be released.

Development finance

If you’re purchasing a commercial property for the purpose of renovation or development, this type of finance is tailored to support the costs associated with refurbishing or improving the property.

Buy-to-let mortgages

For those looking to invest in commercial properties for rental income, a buy-to-let mortgage can provide the necessary funding, specifically designed for properties purchased to rent out.

Private or alternative lending

Some investors choose to explore private lending as an alternative to traditional bank loans. These financing options can offer greater flexibility and quicker approval processes.

Each financing option has its own set of benefits and risks, so it’s crucial to seek professional advice from a broker or financial advisor to determine which solution is best for your needs before pursuing your purchase.

The purchase of commercial property involves a range of legal considerations, making the role of solicitors essential to the process. There are several ways our experienced team at WSP can assist:

Conducting due diligence in a commercial property purchases

Solicitors carry out thorough checks, including title reviews, searches, raising enquiries with the other side and reviewing lease agreements if applicable. These checks are vital to ensuring the property is of good and marketable title before purchasing. Failure to identify any issues prior to purchasing can be costly if you wish to develop or re-sell in the future.

How solicitors draft and review commercial property contracts

A solicitor will ensure that the terms in the contract and transfer are clear, fair, and in your best interests. Seeking advice during the transaction ensures you will avoid any hidden clauses or unfavourable conditions that could later cause issues.

Solicitors play a key role in making sure the financial aspect of the deal is handled properly by coordinating directly with lenders and ensuring the correct transfer of funds.

With an experienced solicitor by your side, like our team at WSP, we can assist you through the process, ensuring you’ll be able to mitigate risks and take the correct steps tailored to your needs.

How WSP Solicitors can help.

If you’re ready to start your commercial property journey or need expert guidance, our experienced team at WSP Solicitors is here to help. Get in touch with us today at contact@wspsolicitors.com or give us a call at 01453 847200. We have offices in Stroud and Gloucestershire, so feel free to reach out for personalised advice tailored to your needs.