Property finance for SMEs - secure funding for your next project
If you’re looking to finance a property, there are plenty of options to consider, each with their benefits and considerations. Compare and apply in minutes with Funding Options by Tide.
Last updated: May 2026, edited by Joe Morley, reviewed by Vivek Seda
Trusted by over 43,000 customers
What is property finance?
Property finance overview
Property finance is any type of loan where a property (e.g. an office or warehouse) is used as security. If you can’t repay the loan, the lender can take ownership of the property. Property finance includes long-term loans like mortgages, as well as short-term options like auction finance.
How does property finance work?
There are many different types of property finance, but here’s how it generally works across the most common types:
Security and valuation: The lender will ask for a property as security, usually by placing a legal charge on it. They’ll arrange a valuation to determine its current worth – or, for development projects, its potential value once the work’s complete.
Lending limits: Lenders typically offer a percentage of the property’s value (eg. 70-80% for a commercial mortgage or 60-75% for development finance). This percentage is called the loan-to-value (LTV) ratio, and it varies depending on the type of finance and the lender’s risk assessment. You’ll need to cover the remaining cost yourself.
Funding release: For some types of finance, like development or refurbishment loans, the money’s released in stages as the project progresses. For others, like commercial mortgages, you’ll usually receive the full amount upfront.
Repayment terms: The repayment terms will depend on the type of finance you get. With a commercial mortgage, you’ll usually pay monthly over several years. And for short-term options, like bridging loans, you’ll typically have to repay in full (plus interest) within several months, sometimes by selling the property or refinancing.
Interest and fees: Interest rates and fees vary depending on the lender and type of finance you choose. Short-term finance tends to have higher rates, while long-term options like mortgages usually offer lower, fixed rates. Some loans also allow you to ‘roll up’ interest, where you pay it all at the end rather than monthly.
What are the benefits of property finance?
Access larger amounts at often lower rates than unsecured loans
Free up cash for day-to-day business needs or growth
Build long-term assets and potential rental income
Gain control over your premises and avoid the uncertainty of renting
Get access to funds for time-sensitive opportunities quickly
What are the risks of property finance?
You could lose the property if you can’t repay the loan
Rising interest rates or falling property values can cause financial issues
Failed exit plans can lead to higher costs or forced sales
Over-borrowing could limit your business’s financial flexibility
Personal guarantees may put your personal assets at risk
Overstating property values or income can lead to legal issues
What can property finance be used for?
Buying property
Purchase residential or commercial properties, whether it’s a buy-to-let investment, a new business premises, or a development opportunity.
Refinancing
Release equity from existing properties or switch to a more competitive rate, giving you access to funds for other investments or improvements.
Property development
Fund new builds, conversions, or major renovations to increase the value of your property or expand your portfolio.
Renovations and refurbishments
Upgrade or modernise residential or commercial spaces, from cosmetic updates to structural changes, to attract tenants or buyers.
Bridging gaps
Cover short-term funding needs, like buying a property before selling another, or securing a purchase at auction.
Expanding your portfolio
Grow your property investments by adding more buy-to-let properties or diversifying into commercial real estate.
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Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Financial product information
Representative example*
• 9.7% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,291.56. The total amount payable is £54,997.44
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 8.2% APR
Repayment period
1 month to 30 years terms
Types of property finance
Buy-to-let finance
Finance for purchasing or refinancing properties you plan to rent out. If you’re setting up a limited company for your rental portfolio, you might consider buy-to-let limited company finance.
Commercial property finance
Funding for business premises, like offices, shops, or warehouses. A commercial mortgage is a common choice, or if your property mixes commercial and residential space, a semi-commercial mortgage could be the right fit.
Short term property finance
Quick solutions for time-sensitive opportunities or gaps in funding. Bridging loans can cover purchases before you sell an existing property, while auction finance helps you secure a property at auction fast. And if you need to unlock equity without remortgaging, a second charge loan might work for you.
Development and refurbishment finance
Finance to build new properties or upgrade existing ones. Property development finance supports new builds or conversions, while refurbishment loans are ideal for renovating residential or commercial spaces.
How to apply for property finance
Is your business eligible for property finance?
Most SMEs can access some form of property finance, but whether your business is eligible will depend on the lender and the type of finance you’re applying for.
Most lenders want to see at least one to two years of trading history
You’ll need to show stable profitability and enough cash flow to cover loan repayments
The property must have a clear commercial purpose, such as business premises, an investment property with tenants, or a development project with planning permission and a sales or lettings strategy
Lenders usually require you to contribute a deposit or equity, often around 20–30% of the property’s value
For specialist finance like development or refurbishment loans, lenders may require a track record in property or construction
What do you need to apply for property finance?
You’ll need to show the lender that your business is stable and the property’s suitable to be used as security.
For your business, you’ll need:
Accounts from the last 2-3 years to prove profitability and cash flow
Recent bank statements (usually six months) to show trading activity
A business plan or projections explaining how you’ll use the funds and repay the loan
Details of any existing loans or overdrafts
For the property, you’ll need:
A clear description, including address, type, and condition
Proof of income potential, like tenancy agreements for investment properties
A valuation or survey report (this is often arranged by the lender)
Planning permissions or development plans if the loan is for refurbishment or development
You may also need:
Proof of identity and address for directors and shareholders
Company incorporation documents
A completed application form with loan details and property use
How to apply for property finance through Funding Options by Tide
Tell us about your business and the funding you need
Compare tailored offers from 30+ UK lenders
Provide documents for underwriting
Finalise your finance and receive funds quickly
How to improve your chances of getting property finance
Organise your financials so they’re up to date and easy to understand
Explain how you’ll use the funds and how you’ll repay the loan
Put down a larger deposit to reduce the lender’s risk and improve your chances
Make sure your credit profile is strong, or show that past issues are resolved
Shop around and compare lenders to find the most suitable terms for your needs
Why choose Funding Options by Tide?
Funding Options by Tide helps UK SMEs find fast, tailored business finance by connecting them with over 80 trusted lenders. Backed by Tide and FCA-regulated, the service is free and easy to use.
Compare 80+ UK lenders in minutes
We scan the market so you don’t have to, finding the right option for your business.
Trusted by 43,000+ UK businesses
From startups to established SMEs, we’ve already helped secure over £1.6 bn in funding.
FCA-regulated and Tide-backed
We operate as a credit broker, not a lender, giving impartial access to multiple finance products.
Excellent customer experience
Our Trustpilot rating is 4.8 out of 5, based on 1,300+ independent reviews.
Personalised support
Our team can guide you through the process and help you choose the finance that fits your needs.
Is property finance right for your business?
Pros and cons compared
Benefits | Downsides |
You can access larger sums to buy, develop, or refurbish property | Your property is at risk if you can’t keep up with repayments |
Repayments are often spread over longer terms, making them more manageable | The application process can be longer, with more checks and paperwork |
Secured loans usually come with lower interest rates than unsecured options | You may need a deposit or existing equity to qualify |
You can unlock equity in existing properties to fund new opportunities | You may have to pay early repayment fees if you pay off the loan ahead of schedule |
How to decide if property finance is right for your business
Consideration | What to check |
Your business type | Are you a property investor, developer, or business owner with a clear plan for the property? It can work well for established businesses or individuals with a solid track record, but it may not suit those without a defined exit strategy or stable income. |
What you need funding for | Is it for buying, refinancing, developing, or renovating a property? Property finance can be ideal for large, one-off investments, but it’s not often the best fit for covering short-term cash flow issues or unrelated business expenses. |
Your financial situation | Do you have a strong credit history, proof of income, and a deposit or equity in existing properties? Lenders will assess your affordability and the property’s value, so it may not work if your finances are unstable or the property is high-risk. |
Your goals | Do you want to grow your property portfolio, secure a commercial space, or fund a development project? Property finance can help you scale quickly, but it may not be the right choice if you’re looking for flexible, unsecured funding. |
Cash flow impact | Can you manage the repayments, whether monthly or at the end of the loan term? It gives you access to significant capital, but missed payments could put your property or assets at risk. |
Alternatives to property finance
Secured business loans
Borrow larger amounts using non-property assets as security, often at lower rates. Ideal for expansions or refurbishments. Learn more about secured business loans.
Asset finance
Spread the cost of equipment or vehicles for property work, like construction gear or office kit. Learn more about asset finance.
Invoice finance
Unlock cash tied up in unpaid invoices to fund ongoing property costs, like fittings or materials. Learn more about invoice finance.
Merchant cash advance
Get quick funds for renovations or conversions and repay a percentage of your future card sales. Learn more about merchant cash advances.
Business credit cards
Cover smaller property expenses, like materials or decor, with short-term interest-free offers. Learn more about business credit cards.
Working capital finance
Bridge cash flow gaps for rental gaps, minor works, or conversions. Learn more about working capital finance.
How does Funding Options work?
Tell us how much you need
We’ll ask a few questions about your business and the reason for your loan.
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Property finance FAQs
How quickly can I get property finance?
The exact speed will depend on the type of finance you choose. Short-term options, like bridging loans can often be arranged in days or weeks. Longer-term products, like development finance, usually take several weeks once all the documents are in place.
How much deposit do I need for property finance?
The deposit will vary depending on the type of finance and the lender. For commercial mortgages, you’ll typically need 20-30% of the property’s value. A bigger deposit can usually improve your chances of approval and may also help secure lower interest rates.
How do fixed vs variable interest rates work for property finance?
Fixed interest rates stay the same for an agreed period, giving you certainty over your repayments.
Variable rates can change without warning. They can be cheaper when interest rates are low, but they carry the risk of increasing if rates rise.
In property finance, what are exit strategies and why do lenders care?
An exit strategy is your plan for repaying the loan, and it reassures lenders that you’ll have a way to repay what you borrow. Lenders typically want to see a clear, realistic exit strategy, such as selling the property, refinancing, or using rental income.
Can I use property I already own as security for property finance?
Yes, you can often use property you already own as security for a loan – usually done through a first or second charge on the property. But bear in mind this puts the property at risk if you can’t keep up with repayments.
Do I need a personal guarantee to get property finance?
Many property financing products for SMEs do require a personal guarantee. This means that, as a director, you could be personally responsible for repaying the loan if your business can’t. It’s a major commitment, so make sure you fully understand the risks before agreeing to it.
Can I get property finance with a limited credit history?
It’s often possible to get property finance even if your business has a limited credit history or past issues. But you may need to provide a larger deposit, accept a lower loan-to-value ratio, or work with a specialist lender to get it.
Can I refinance an existing property loan?
Yes, refinancing is a common way to switch to better terms or release equity tied up in your property. For example, you might move from a short-term bridging loan to a longer-term commercial mortgage, or increase your borrowing once you’ve improved the property.
