Trading Business Mortgages Devon
Hotels, holiday lets, care homes, dental practices, MOT garages, day nurseries, pubs, B&Bs. Operational property where value is bound up with the business that runs from it. EBITDA-led underwriting plus sector-specific overlays, CQC, Ofsted, VOSA, NHS UDA, occupancy and RevPAR. LTVs 60–70%, interest rates 7.0–9.0% pa, 15–25 year repayment terms. Limited company structures supported.
LTV
60–70%
Rate
7.0–9.0% pa
Term
15–25 years
Facility
£250K–£5M
What is a sector-specialist commercial mortgage?
Trading-business mortgages fund operational commercial property where the value is bound up with the business that runs from it. Unlike pure investment property, where the test is rent against mortgage cost, trading-business mortgages test EBITDA cover: the trading profit of the business covering the mortgage repayment, typically at 1.5–2.0× cover. Goodwill, brand, sector regulation and going-concern value all influence the lend.
Underwriting is sector-specific and depends entirely on the property type. Hotels and holiday lets: occupancy, ADR (average daily rate), RevPAR, seasonality, brand affiliation, location, central to a tourism county like Devon. Pubs: barrelage (volume of beer pulled), EBITDA, beer-tie status (free of tie pubs price keenest), license type, trading record. Care homes: CQC rating, occupancy, weighted-average bed value, fee rates (council vs private mix). Dental practices: NHS UDA contract value, private fee mix, principal vs associate structure, surgery count. MOT and petrol: VOSA approval, turnover, environmental due diligence on the site. Day nurseries: Ofsted rating, registered places, occupancy, fee structure.
Loan-to-value runs 60–70% typically, lower than pure investment because the asset value is sector-locked and harder to repurpose if the business fails. Term 15–25 years; interest rates 7.0–9.0% pa reflecting the specialist underwrite. Different sub-sectors route to different lenders, and getting the right desk first time is the broker's entire job. Most trading-business mortgages are taken out by a limited company trading entity with personal guarantee from the operating principal, and most fall outside FCA-regulated mortgage rules because they finance business premises, not residential property.
Stamp duty land tax on a trading-business purchase follows commercial rates (0% to £150K, 2% to £250K, 5% above), and where a deal is structured as a share purchase of an existing operating limited company rather than an asset purchase, SDLT can be deferred or partly avoided. We work alongside the buyer's tax adviser on the structure before submission. Refinancing an existing trading-business mortgage (typically off a maturing 5-year fix) is a frequent reason to re-engage; current rate environment is creating refinancing demand particularly on hotel, holiday-let and care home operator books.
Steps from sector review to specialist credit committee
1. Sector and trading review
Two years of accounts, current management figures, sector-specific data, CQC for care, Ofsted for nursery, VOSA for MOT, occupancy and ADR for hotel and holiday let, barrelage for pub.
2. Specialist lender shortlist
Sector dictates lender. Care: Shawbrook, Cambridge & Counties, Hampshire Trust. Hotel / pub / leisure: Cynergy Bank, ASK Partners. Dental: Hampshire Trust, Allica health desk.
3. Indicative terms in 48 hours
Interest rate, loan-to-value, EBITDA cover requirement, repayment term, fees. From a clean enquiry only.
4. Sector-specific credit pack
CQC inspection report for care, Ofsted report for nursery, NHS UDA contract for dental, license and barrelage for pub, occupancy and RevPAR for hotel. Cleaner pack = faster credit.
5. Specialist RICS valuation
Sector-accredited RICS valuer instructed by the lender. Critical-path item, typically 3–5 weeks.
6. Credit approval and completion
Specialist desks underwrite slower than mainstream commercial. Allow 6–10 weeks total from indicative to drawdown.
Operator profiles routing through this product
- Hotel and guest-house operators (Torquay, Paignton, the English Riviera, Exeter)
- Holiday let and B&B operators (the coast, Dartmoor, the South Hams)
- Pub and bar operators (Plymouth Barbican, the harbour towns, market-town centres)
- Care home operators (Exeter, the Riviera and Newton Abbot clusters)
- Dental and GP practice principals (Exeter, Plymouth and county-wide)
- MOT garage and petrol forecourt owners (Plymouth, Exeter and the A30/A38 corridors)
- Day nursery operators (Exeter, Plymouth and the larger towns)
- Veterinary practice principals acquiring multi-site groups
Sub-sector clusters and lender behaviour across Devon
Devon runs one of the deepest hospitality and trading-business commercial mortgage flows in the South West, driven by a tourism-led economy. The English Riviera (Torquay and Paignton) is a hotel, guest-house and holiday-let sub-market in its own right; Cynergy Bank, ASK Partners and licensed-trade and leisure specialist desks dominate the hospitality end. The care-home market around Exeter, the Riviera and Newton Abbot is deep; Shawbrook, Cambridge & Counties and Hampshire Trust Bank all hold significant South West care-home books. Dental and GP clusters across Exeter and Plymouth route through Hampshire Trust and Allica's health desk. MOT and garage deals run primarily through Together, with environmental due diligence the additional underwrite step. Day nurseries cluster around the two cities, with Aldermore and Cambridge & Counties providing the core lender appetite.
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Free-of-charge scheme assessment. Indicative terms within 48 hours.