The Lender Assessment Framework

Lenders assess three core elements: person, property, and purpose. They evaluate your financial strength and track record. They assess the property value and condition. They understand why you need funds and your repayment capacity.

Requirements vary by lender. Mainstream banks have stricter criteria than specialist lenders. Your specific situation determines which lenders will consider your application.

Personal Eligibility Requirements

• Age 18 or over, typically up to 75 (older possible)
• UK resident or significant UK business presence
• Valid identification (passport or driving licence)
• 6 months of personal bank statements
• Proof of address dated within 3 months
• Clear credit history, though perfection is not required. See bad credit commercial mortgages for more info

Business Requirements

• Business registration confirmation
• The last two or three years of filed accounts
• 6 months bank statements
• Personal tax returns for all directors
• Management accounts, if filed accounts are outdated
• Permission to carry out a credit search

Financial Assessment

Lenders calculate your Debt Service Coverage Ratio (DSCR). This compares your business operating profit to total debt repayments. Most lenders require a DSCR of at least 1.25:1. This means business profit should exceed loan payments by at least 25%.