How Long Does It Take to Get Approved for a Commercial Mortgage?

Securing a commercial mortgage is a significant step for any business, whether you’re buying your first premises, expanding your portfolio, or refinancing an existing loan. Unlike a residential mortgage, the commercial lending process is more detailed and less standardised. Understanding the timeline is crucial for planning, especially if you have a completion deadline in mind. While the exact duration can vary, most applicants can expect the process to take anywhere from two to six months.

This guide breaks down the typical stages of a commercial mortgage application, explores the factors that can cause delays, and offers practical tips on how to speed up your approval.

A Typical Commercial Mortgage Timeline

The journey from initial enquiry to receiving the funds is a multi-stage process. Each step has its own timeline and involves different professionals, including brokers, underwriters, surveyors, and solicitors.

Stage 1: Initial Enquiry and Decision in Principle (1–2 weeks)

The first step is to approach a lender or, more commonly, a specialist commercial mortgage broker. A good broker will assess your circumstances and match you with a suitable lender from the wider market. During this phase, you will provide an overview of your business and your plans for the property.

You will need to supply initial information, such as:

• Your business’s trading history and accounts
• A solid business plan (especially for new ventures)
• Details of the property you wish to purchase or refinance
• Information about your experience and financial standing

Based on this, the lender may issue a Decision in Principle (DIP) or Agreement in Principle (AIP). This is a conditional, non-binding statement that indicates the lender is likely to approve your application, subject to full checks and property valuation. It gives you the confidence to proceed with the full application.

Stage 2: Full Application and Underwriting (4–8 weeks)

This is the most intensive part of the process. You will need to complete the lender’s full application form and provide a comprehensive set of documents. The lender’s underwriters will then conduct a deep-dive assessment of the risk involved.

They will scrutinise:

• Your business’s financial health: They will analyse several years of accounts, profit and loss statements, and future projections to ensure the business can comfortably afford the repayments.
• Your personal finances and credit history: Lenders will look at the credit files of all company directors. It’s a good idea to know what’s on your report beforehand. Get your free credit search here. It’s free for 30 days and costs £14.99 per month thereafter if you don’t cancel it. You can cancel at anytime. (Ad)
• The property itself: They will assess its suitability as security for the loan. Is it a standard office or retail unit, or something more specialised like a hotel or care home?

This stage can take a long time, as underwriters may have follow-up questions or request additional information. Prompt and complete responses are key to keeping things moving.

Stage 3: Property Valuation and Legal Work (4–6 weeks)

Once the underwriters are provisionally satisfied, the lender will instruct a surveyor from their approved panel to conduct a valuation of the property. The purpose of this valuation is to confirm that the property offers sufficient security for the loan amount. If the property is valued for less than you expected (a “down-valuation”), it could impact the amount the lender is willing to offer.

At the same time, solicitors for both you and the lender will begin the legal work, known as conveyancing. This involves checking the property title, conducting local authority searches, and preparing the legal charge that secures the loan against the property. The legal process is a common source of delays, especially if complex issues arise.

Stage 4: Formal Offer and Completion (1–2 weeks)

If the valuation is acceptable and all legal checks are clear, the lender will issue a formal, legally binding mortgage offer. You and your solicitor should review this carefully. Once you have signed and returned the offer, the final legal steps are taken. Your solicitor will agree on a completion date, request the funds from the lender, and transfer them to the seller’s solicitor to complete the purchase.

What Factors Can Affect the Timeline?

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Several variables can speed up or slow down your commercial mortgage application. Understanding these can help you manage your expectations.

The Complexity of Your Case

A straightforward application from an established, profitable business buying a standard office building will generally be quicker than a complex one. Applications involving startups with no trading history, specialised properties, or intricate company structures (like offshore holdings) will require more scrutiny and therefore take longer.

The Quality of Your Application

One of the biggest causes of delays is an incomplete or poorly prepared application. Missing documents, inconsistent figures, or a weak business plan can lead to a stream of questions from the underwriter, adding weeks to the process. Being organised from the outset is a major advantage.

The Lender You Choose

Lenders vary significantly in their efficiency. High street banks are often perceived as being slower due to their size and rigid processes. Specialist commercial lenders may be more agile and able to process applications more quickly, especially for non-standard cases. A broker’s knowledge is invaluable here, as they know which lenders are currently offering good service levels.

Legal and Valuation Issues

Unexpected problems found during the valuation survey or legal searches can cause significant delays. These might include structural defects, planning permission discrepancies, environmental concerns, or unresolved issues with the property’s title deeds. While you can’t always predict these, using an experienced solicitor can help resolve them efficiently.

How Can You Speed Up the Approval Process?

• Work with a specialist broker: An experienced commercial finance broker can prepare and present your application professionally, anticipate lender queries, and chase all parties involved to keep the process on track.
• Get your paperwork in order early: Gather all necessary documents, such as accounts, bank statements, tax returns, and business plans, before you even apply.
• Be responsive: Respond to any requests for information from your broker, the lender, or your solicitor as quickly as possible. Delays in your responses will directly lead to delays in the timeline.
• Choose a proactive solicitor: Instruct a solicitor who has experience in commercial property transactions and who is known for being communicative and efficient.

What If You Need Funding More Quickly?

If the typical two-to-six-month timeline for a commercial mortgage is too long, for example, if you need to buy a property at auction, a bridging loan could be an alternative. Bridging finance is a short-term solution designed to be arranged quickly, often in a matter of weeks.

Ultimately, while there’s no way to guarantee a specific timeframe, being well-prepared is the best strategy. By understanding the process and working with the right team of professionals, you can navigate the commercial mortgage application with confidence and avoid unnecessary delays.