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Can I get a homeowner business loan?

Your home must be mortgaged to take out a homeowner business loan. The borrowing has to be used for business purposes and not for personal use and you cannot use the borrowing to save a failing business from financial difficulties.

However, if you have available equity that you can borrow against, then there is every reason you will be accepted for this sort of loan.

Factors that may affect your application

  • Not having a mortgage on your home
  • Not having enough equity to borrow against
  • Wanting to borrow for reasons other than your business
  • Some types of adverse credit

Chat to our advisors today to discuss your needs, by calling on the freephone number above, talking to us via live chat, or requesting a call-back here.

Eligibility for a homeowner business loan

  • You must be a homeowner have a mortgage
  • You must be over 18 years old
  • You must have equity in your home to borrow against
  • You must be borrowing for business purposes
  • Low personal incomes are accepted
  • Property, pension and employment income is OK
  • Ready to get started?

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What is a homeowner business loan?

A homeowner business loan is where you would use equity in the home you live in as security, where the money you are raising is for your business.

There must be a residential mortgage on your home to take out this type of borrowing. This is because it is very important that the borrowing is clearly for business use.

Homeowner business loans provide both established business owners and start-ups with a great way to borrow money, if you aren’t able to get funding in other ways, or need access to cash quickly.

You can take out these loans over a short-term basis of several months as a bridging loan, or over the long-term for many years, as a standard mortgage.

However, you should be aware that by putting your home as the collateral against the loan, your property is at risk of repossession by the lender, if you cannot keep up with payments.

Affordability checks will be part of the application process, but you must be comfortable you can keep up with the payments too.

What can you use this loan for?

Homeowner business loans can be useful in a variety of ways, you can use the money to:

  • Buy business equipment, pay for fixtures and fittings
  • As a deposit for flipping property
  • As a deposit to buy property to run your company from
  • As a deposit to buy property to rent out to residential tenants
  • To ease business cash-flow by paying off creditors whilst waiting for invoices to be paid
  • Pay business bills

Essentially, you can borrow for any legal business purpose.

How much can I borrow?

You can borrow up to 75% of the property value. So, if your residential mortgage is currently 50% of the value of your home, you can borrow 25% of its value using a homeowner business loan.

Loans can be from as little as £25,000 and up to £2 million. Your property value can be from £50,000. So, as you can see, borrowing is very flexible.

I have a mortgage on my home, how will a homeowner business loan affect it?

The loan sits alongside the existing mortgage on your home. You do not have any Early Repayment Charges to pay if you take out one of these loans. Your existing interest rate is unaffected and will remain in place. This is because you aren’t changing anything about the existing borrowing.

Where you have a mortgage on your home and want to take out a homeowner business loan, that borrowing is the ‘second charge’ over your property.

Do I have to have permission from my existing mortgage lender?

You can still get a homeowner business loan against your property, even if your first charge residential mortgage lender won’t consent to a second-charge on the property – as some homeowner-business loan lenders do not require consent from the first charge lender in order to release funds.

I own my home outright, can I get a homeowner business loan?

No you can’t. This is because this type of borrowing is only allowed to be offered to fund business costs. Where there is no other borrowing on a property, this presents a risk that the money could be used in a regulated scenario, which lenders have to guard against.

The reason for this is that any regulated consumer borrowing should fall under additional protections offered by the Financial Conduct Authority (FCA), whereas business borrowing anticipates the applicant is more informed about the risks of borrowing and so FCA protection is not required.

Why choose Commercial Trust?

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Apply with ease by phone

It couldn't be easier to secure a homeowner business loan with our expert advisors. Ask all your questions and arrange an application on the phone from your sofa.

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World class customer service

We’ll find you a great deal and take all the admin work off your shoulders, so you can relax while we get your loan completed. All the while giving you progress updates.

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Lender decision in 2 hours

By contacting you by phone and email you can get help more quickly than in-person services. It’s possible to get you a lender decision in principle in as little as two hours after our call.

We can help you with...

  • Second charge borrowing for business purposes
  • Getting funds quickly (within days)
  • Borrowing up to 75% loan to value
  • Short-term (months) or long-term (years) borrowing
  • Borrowing against properties worth £50,000 or more
  • Borrowing from £25,000 - £2 million
  • Borrowing in personal name
  • Borrowing via a limited company
  • Flexible affordability calculations
  • Borrowing for businesses of any size
  • Borrowing with some adverse credit
  • Borrowing with a low personal income

Costs involved in a homeowner business loan

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  • Lenders may charge you for the valuation conducted on your property. They often also charge a product fee, sometimes this can be added to the mortgage.

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  • You will need a conveyancing solicitor who will charge fees. Read our guide to choosing a conveyancing solicitor.

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  • We charge a broker fee for our work. You pay in two parts. A booking fee, once we have found you a mortgage deal, at application. The majority of our fee is paid at completion of the mortgage.

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  • Every mortgage comes with monthly mortgage costs based on the mortgage interest rate the lender charges. These are paid on either an interest-only or capital repayment basis.

How to apply for a homeowner business loan


Tell our advisors about the property you want to use as security, your needs, and circumstances. If you have credit concerns, chat to us about them, so we can put you with the right lender.


Your advisor will find the best possible deal from a search of thousands of products. They will get you a lender decision in principle, this requires a soft credit search (occasionally it is a hard credit search).


Your advisor will call to discuss the product they have found for you. You will be presented with one mortgage, that is the best match for all your needs and offers you the most cost effective option.


On your instruction, your advisor will submit your application. Your account manager then does all liaison and administrative work to complete the deal, whilst keeping you updated at every step.

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Frequently asked questions

Yes you can. This is called a homeowner business loan. It is a type of secured loan that offers business owners the opportunity to raise capital from equity in their home. You can access money quickly (within days) and borrow over several months or several years.

Yes, if you have a home with a mortgage on it, using a homeowner business loan is an ideal way of raising business funds whilst self-employed.

Criteria for a homeowner business loan is very flexible, which is one of the great things about them. If you own your home, it has a mortgage on it, and there is enough equity left to borrow against you will be considered. Some adverse credit is accepted too, so you may still be able to borrow if you are concerned about your credit profile.

Unfortunately, the maximum you can borrowing that can be secured against your house once a homeowner business loan is in place is 75% of its value. So, your residential mortgage needs to be low enough to give you the potential to borrow the sum you need.

If you mortgage is 40% of the value of your home, you could borrow up to 35% via a homeowner business loan, if your mortgage is 50%, you could borrow up to 25% of its value, and so on.

The homeowner business loans we can access are not cheaper than a typical mortgage, because they are higher risk.

This is because if you fail to pay your monthly mortgage costs the lender your residential mortgage is with will be the first to recoup your debt. The homeowner business loan will be second in the queue.

However, there are many circumstances where homeowner business loans can be a very useful borrowing tool.