There is very little difference between commercial and residential mortgages. In fact the only real difference is that the company will own the property and pay back the loan.

However, the lending criterion is a lot different to residential mortgages. The lenders willing to work in this sector are not your normal building societies.

Most people will look to their high street bank for commercial mortgages. The high street banks often have very strict lending criteria and often turn down loans. What most people do not realise is that there are hundreds of commercial brokers and commercial lenders who understand business funding and have much more relaxed criteria.

The maximum amount that the lender will typically give is normally 85% of the purchase price. However 100% deals are available with extra security.

The length of the mortgage can be anything between 1 to 30 years. You can choose to have a repayment mortgage or interest only.

Like residential mortgages there are always special deals available and you can choose between a variable or fixed interest rates.

The process to obtain the loan is also very similar to residential mortgages. You will first receive a written decision in principle for the loan. This is a note from the lender detailing the rates he would be prepared to offer you based on the information he has received.

Assuming you are happy with the 'Decision in principle' offer you will be asked to complete a formal application. This requires a lot more detail information about the business and the property.

Before the lender makes a formal offer the property/business needs to be valued. If any issues arise from the valuation or formal application then the lender may withdraw from the deal or change the terms offered on the 'Decision in Principle'.

You are now ready to pass the deal over to your solicitor. They will complete the paperwork and transfer the funds.