I have lost count of the times I have heard commercial mortgages described as nothing more than a way to buy premises. It is an understandable view, but it misses much of their potential. In the right circumstances, they can bridge the gap between one generation of business owners and the next, underpin acquisitions that transform a company, or, when combined with other finance, set a business on a course that lasts for decades.
For brokers, this change has opened the door to a different way of working. The most effective ones I work with no longer see themselves as simply sourcing a loan. They step back and take in the bigger picture: the assets the client holds, the ambitions they have, the challenges they face.
They think in terms of packages, such as a commercial mortgage alongside asset-based lending or invoice finance, to give stability in the long term and flexibility in the short term. And they know that the best results happen when they are involved early, helping to shape the deal from the outset.
At LHV Bank, we have built our approach around these more involved cases. We are prepared to look beyond the property as an end in itself, focusing on how it fits into the borrower’s business model and long-term plans. That means weighing up growth potential and the sustainability of the strategy, as well as the value of the asset. When timelines are thin, we can move quickly. And by working in tandem with brokers, we make sure the facility supports the client’s bigger picture. This combination of flexibility and collaboration helped our SME loan book grow by 30 per cent year-on-year in the first quarter of 2025.
A deal we completed earlier this year shows how this works in practice. A seasoned property investor came to us seeking £5m to refinance two care home assets and fund further acquisitions. The homes were run by registered charities providing specialist care services, which meant our due diligence had to look beyond the buildings to the financial strength and operating model of the providers. The transaction involved refinancing three existing loans and meeting a three-week completion deadline from the point of credit approval.
We structured the facility as a five-year term loan, amortised over 20 years. Our in-house underwriting and lending operations teams worked closely with legal advisers on a dual-
representation basis and the deal was completed ahead of schedule, giving the borrower a secure long-term structure for their portfolio and the flexibility to pursue further acquisitions.
The wider market makes this kind of lending all the more relevant. UK Finance data shows that in the first quarter of 2025, gross lending to SMEs reached almost £4.6bn, up 14 per cent on the same period in 2024. Lending to the smallest businesses grew even faster, increasing by 30 per cent year-on-year. This is the strongest quarterly performance since mid-2022 and underlines both the demand for funding and the opportunities for brokers to support clients in securing it.
This is definitely the time to act if you are a broker. Recognise when a commercial mortgage can do more than secure an address. Work with lenders who are prepared to take a broader view. Help clients through the changes and, in doing so, strengthen your role as a trusted partner.
A mortgage can be more than bricks, mortar and a set of keys. Used well, it can keep a business in safe hands, fuel its expansion, or anchor it through a period of change. I have seen it happen many times, and when it does, the impact can last far beyond the term of the loan.
Conor McDermott is director of SME lending at LHV Bank
