£525,000 of borrowing against a property priced at £700,000 represents 75% loan-to-value.
Commercial Funds Required Calculator
Estimate Additional Costs On Commercial Mortgage
Purchasing, refinancing or improving a commercial property can involve more than the property price alone. Legal work, valuation fees, lender charges, tax and project costs can all affect the amount of funding required.
Our Commercial Funds Required Calculator brings these figures together and deducts the capital you have available. This provides an initial estimate of the potential funding gap for your transaction.
Commercial mortgages and some forms of business finance are not regulated by the Financial Conduct Authority.
Calculate Funds Required For Commercial Mortgage
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£
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Enter a lender arrangement fee between 1% and 7%.
Costs can significantly vary if the purchase price exceeds £1m.
The cost breakdown is estimated indicative of how much funds you would be required to have available for potential property purchase.
Please note: Results are estimates only. They do not constitute financial advice, a recommendation, a formal finance quotation, or confirmation that funding will be available.
Calculator Output
Your Estimated Result
The calculator shows the main funds and costs that may be needed for a commercial property transaction.
Deposit needed - the difference between the purchase price and the loan amount
Commercial stamp duty - calculated using the current non-residential stamp duty tiers
Legal costs - a fixed estimate for your solicitor's fees
Lender solicitor costs - a fixed estimate for the lender's legal fees
Valuation fee - a fixed estimate for the lender's commercial property valuation
Mortgage offer fee - calculated as 1% of the loan amount
Lender arrangement fee - calculated using your entered percentage of the loan amount
Contingency expenses - a fixed allowance for unexpected costs
Total funds required - the sum of all the above
Loan-to-value (LTV) - the loan amount expressed as a percentage of the purchase price
The result does not confirm how much you can borrow. Commercial finance applications are assessed individually and remain subject to lender criteria, valuation, and approval.
Why Use It
Why Use This Calculator?
The purchase price does not always show the full amount needed to complete a commercial property transaction.
Bring the main transaction costs into one estimate
Include refurbishment or improvement expenditure
Allow for professional and lender fees
Compare the total cost with your available capital
Identify the approximate funding gap
Prepare for an initial conversation with a commercial finance broker
The figures should be reviewed carefully before you commit to a purchase or project.
Worked Example
Commercial Funds Required Example
The following example is for illustration only.
Purchase price£700,000
Loan amount required£525,000
Lender arrangement fee2%
Safe loan£525,000, does not exceed purchase price
Deposit£700,000 - £525,000 = £175,000
Stamp Duty£2,000 + ((£700,000 - £250,000) x 0.05) = £24,500
Legal Costs£3,500
Lender Solicitor Costs£2,000
Valuation£1,250
Mortgage Offer Fee£525,000 x 0.01 = £5,250
Contingency Expenses£1,500
Lender Arrangement Fee£525,000 x 0.02 = £10,500
Total Funds Required£223,500
Loan-to-Value(£525,000 / £700,000) x 100 = 75%
This does not mean that a lender will offer £525,000. The amount available will depend on the property's valuation, the lender's maximum loan-to-value, the strength of the business and its ability to meet the proposed repayments.
The example is illustrative only. Taxes, fees and other costs will depend on the transaction and professional advice received.
Costs
What Costs Should You Include?
The calculator includes the following categories. Some are fixed estimates; others are derived from your inputs.
Deposit
Commercial Stamp Duty
Legal Costs
Lender Solicitor Costs
Valuation
Mortgage Offer Fee
Lender Arrangement Fee
Contingency Expenses
Some costs may be payable before the finance completes and may not be refundable if the transaction does not proceed. You should also budget separately for items not included in this calculator, such as broker fees, insurance, refurbishment costs, VAT and initial operating costs.
Commercial SDLT
How Commercial Stamp Duty Is Calculated
The calculator uses the current UK non-residential Stamp Duty Land Tax rates for commercial property. These rates apply to freehold purchases and lease premiums.
Up to £150,0000%
£150,001 to £250,0002% on the portion within this band
Above £250,0005% on the portion above £250,000
Example for £700,000:
First £150,000 at 0% = £0
Next £100,000 at 2% = £2,000
Remaining £450,000 at 5% = £22,500
Total stamp duty = £24,500
If you are unsure whether standard commercial rates apply to your transaction, for example if mixed-use rules, multiple dwellings relief or surcharges may be relevant, you should seek appropriate tax advice.
Lender Assessment
How Much Might a Lender Provide?
The result shows the estimated amount required, not the amount a lender is prepared to offer.
The property's purchase price and valuation
The requested loan-to-value
The business's trading history
Profitability and cash flow
The proposed monthly repayments
Existing business commitments
The borrower's experience and credit profile
The property type, condition and location
For a commercial investment property, the lender may also consider the lease, tenant, rental income and whether the rent is sufficient to support the proposed borrowing.
Commercial mortgage calculators commonly use the loan amount, interest rate and term to estimate repayments, but actual commercial lending decisions also depend on the wider transaction and borrower profile.
Loan-to-Value
Your Contribution and Loan-to-Value
The loan-to-value ratio is calculated automatically and shows what proportion of the purchase price is being financed.
A larger contribution may improve the mortgage products and interest rates available to you, but it does not guarantee higher borrowing.
The lender may use the lower of the purchase price and valuation or apply another valuation basis. A lower-than-expected valuation could reduce the amount available and increase the capital you need to contribute.
FAQ's
Frequently Asked Questions
It is the sum of your deposit plus all associated purchase costs, fees and contingency. It represents the total capital you need available to complete the transaction.
Discuss Your Commercial Funding Requirements
Speak to an adviserTalk to Pure Capital about commercial finance
The calculator can help you estimate the total funds required, but arranging commercial finance requires a detailed assessment of the business, property and proposed transaction.
Pure Capital can help you understand the commercial finance options that may be available and explain the information lenders are likely to require.
Commercial mortgages and some forms of business finance are not regulated by the Financial Conduct Authority.