What Business Owners Underestimate About Refinancing Commercial Property

Refinancing a commercial property can be a really useful tool — whether that’s to release capital, improve cashflow, or support the next stage of your business.

But it’s also something many business owners assume will be quicker and easier than it actually is.

In practice, refinancing can come with as much scrutiny as the original purchase.

Refinancing isn’t automatic

One of the biggest surprises for business owners is that refinancing isn’t treated as a simple extension of an existing deal.

Lenders will usually reassess:

• the property

• the business or personal finances behind it

• how the loan stacks up today, not when it was first taken out

  
  

Even if you’ve held the property for years and made every payment on time, lenders still want to be comfortable that the deal works now.

Property condition and paperwork still matter

Refinancing typically involves updated valuations, surveys, and legal checks.

Issues that didn’t seem important at purchase — such as lease wording, property condition, or compliance points — can suddenly become sticking points.

These don’t always stop a refinance, but they can slow things down or limit lender choice if they’re discovered late.

Lender criteria varies more than people expect

Different lenders take very different views on:

• loan-to-value

• income coverage

• business structure

• covenant requirements

Many business owners assume refinancing will be more relaxed than buying, but in reality the criteria can be just as tight — depending on the lender and the deal structure.

Timing is about more than rates

Refinancing works best when it’s planned around what the business is trying to achieve.

That might be:

• freeing up capital for expansion

• restructuring borrowing

• simplifying existing arrangements

• planning ahead for succession or exit

  
  

Leaving it too late can reduce options and create unnecessary pressure.

Taking a more joined-up approach to refinancing

Successful commercial refinancing usually comes down to preparation and lender selection.

A commercial mortgage broker can help by:

• sense-checking whether refinancing is viable before costs are incurred

• identifying lenders whose criteria genuinely suit the business and property

• structuring the finance to support longer-term plans, not just the next renewal

At Bournemouth Mortgages, we work with business owners and investors to look at refinancing in context — making sure it fits the wider picture rather than treating it as a standalone transaction.

If you’re a business owner considering refinancing, our sole trader & small business commercial mortgages page explains how lenders reassess existing borrowing and what to expect when reviewing your options.

Sources

• Grant Thornton – Financing headwinds for commercial real estate

  https://www.grantthornton.co.uk/insights/financing-headwinds-for-commercial-real-estate/

• British Business Bank – Finance options for UK businesses

  https://www.british-business-bank.co.uk/finance-options/

  
  

• Harper James – Refinancing commercial property (legal overview)

  https://harperjames.co.uk/article/refinance-a-commercial-property/