The retail properties for which mortgage finance is easiest to obtain are existing businesses that can provide several years’ trading accounts which demonstrate their continuing profitability. Most commercial lenders would normally be more than happy to lend money at a competitive rate for the purchase of this type of retail business.

If you plan to buy a shop and use it for a different retail purpose, for example, converting a bakery into a jeweller’s shop, most mortgage providers would insist on a self-certification mortgage which would carry an interest rate of around 1 percent higher than a normal commercial mortgage. Lenders will expect a business plan which can convince them that this different type of retail business would be viable in the chosen location.

Convenience Stores

The traditional urban corner shop or rural general store used to be a solid retail business proposition. Nowadays, however, the increasing power of the large supermarket chains is squeezing independent food retailers, throughout the UK. Not content with constructing an ever increasing number of large superstores, companies such as Tesco and Sainsburys are taking over and re-branding many smaller high street food stores and also petrol filling stations, with serious consequences for the rest of the independent food store sector.

The saving grace for many independent retailers is to use part of their premises as a sub post office. Operating a post office franchise offers a guaranteed income and this can sometimes make all the difference when applying for a commercial mortgage and being able to make regular repayments. Recently, however, the Post Office has started to rationalise its branch network and terminated many urban sub post office contracts, with the result that, in some areas, post office franchises can be difficult to obtain.

Borrowers should also be aware that mortgages for convenience stores with living accommodation that covers more than 40 percent of the property’s floor area are subject to regulation by the FCA.


  • Commercial lenders are keen to provide mortgages for existing profitable retail businesses
  • Interest rates charged by mortgage providers are usually higher when a shop is purchased for use as a different type of retail business
  • Convenience stores are suffering intense competition from the major supermarkets

Access Commercial Ltd can help with all types of shop mortgages.

Access Commercial Mortgages can help with all commercial finance needs; contact us today for a fast response.

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