Manufacturing and light industrial finance

How much can you borrow against a light industrial unit?

Borrowing on a manufacturing or light industrial unit is sized differently depending on whether it is owner-occupied or held as an investment. For a let unit we arrange an investment commercial mortgage up to around 70 percent loan to value (LTV), sized off the lease, the covenant and the residual flexibility of the building. For an owner-occupier, lenders assess the trading business as well as the property when setting the loan to value.

Specification varies with the process inside, from straightforward assembly to power-hungry production lines, so a building heavily fitted to one occupier is read more cautiously than a flexible unit. We present the wider demand for the location and the adaptability of the space so the loan to value reflects how readily the industrial unit could be relet rather than its current fit-out alone.

For an owner-occupier, the borrowing capacity often turns as much on the trading business as on the building. A profitable company with a steady order book can support a deal that the bricks alone might not, because lenders see the income servicing the debt. We bring the trading accounts and the property valuation together so the commercial mortgage is sized on a full picture of the business and the premises.

Is it better held as an investment or owner-occupied?

Both routes are common, and the right one depends on the client. Many businesses choose to own the premises they trade from, holding the industrial unit as a long-term asset and servicing an owner-occupier commercial mortgage out of trading cash flow. This gives control over the building and captures any capital growth, with manufacturing the largest occupier type in the market in 2025 at around 33 percent of take-up per Savills.

For a landlord, a let manufacturing unit is an investment sized on the lease and covenant, with rental income covering the debt. We arrange owner-occupier mortgages for trading businesses buying their own premises and investment mortgages for landlords holding let stock, structuring each so the loan to value and the term suit the way the asset is held.

The cash profile differs too. An owner-occupier services the loan from trading profit, so a longer amortising term keeps the monthly cost manageable while the business builds equity in the building. A landlord services an investment mortgage from rent, so the term tracks the lease and the covenant. We map which structure fits the client's plans before sizing the loan to value.

There is also a strategic dimension. Owning the premises gives a manufacturer control over a building that may be fitted to its process, removes the risk of a landlord declining to renew a lease, and turns rent that would otherwise leave the business into equity in a long-term asset. For others, leasing keeps capital free for plant and working capital, and a let unit suits an investor seeking industrial income. We talk the client through both routes so the finance follows the right ownership decision rather than driving it.

What do lenders look for in an owner-occupier deal?

On an owner-occupier purchase, lenders assess both the property and the trading business behind it. They look at the company's trading performance, profitability and ability to service the debt from cash flow, alongside the value and flexibility of the industrial unit itself. Both property lenders and trading-business lenders are active in this space, which widens the options we can introduce.

Lenders also take a view on how readily a process-specific building could be relet if the occupier left, since a heavily fitted production facility is less flexible than a plain workshop. We present the trading accounts and the wider demand for the location together so the loan to value reflects the genuine strength of both the business and the building.

Where a business has a strong trading record, the income from the company can support a deal that the bricks alone might not, which is one reason owner-occupiers often reach a sensible loan to value on premises that would be harder to fund as a pure investment. We bring the accounts and the property valuation together so the lender can see both sides of the case.

Can you refinance or remortgage a manufacturing unit?

Yes. We refinance owner-occupied and let industrial units onto a new commercial mortgage or term loan, commonly to release equity for investment in the business, to fund expansion, to fix a rate or to replace a maturing facility. On an owner-occupier deal the loan to value is set against both the current value of the unit and the trading performance of the business.

Where a business needs to move quickly to secure or expand a site we arrange bridging ahead of longer term debt, then remortgage onto a term commercial mortgage structured around the trading business once the building is in use. Refinancing is often the route businesses use to unlock capital tied up in premises they already own.

As a company's trading record strengthens, a refinance can also secure a keener rate than the original facility, since lenders read a longer track record of profit as lower risk. We bring the latest accounts and an updated property valuation to the table so the new commercial mortgage reflects both how the business has grown and how the value of the industrial unit has moved.

What rates and terms can you expect on a light industrial mortgage?

Pricing on a manufacturing or light industrial unit depends on whether the deal is owner-occupier or investment. On a let unit, the rate is set off the lease, the covenant and the loan to value, and a flexible building with a sound tenant prices more keenly than one heavily fitted to a single process. On an owner-occupier deal, lenders also weigh the trading performance of the business, so a profitable company servicing the debt comfortably supports a better rate.

Owner-occupier terms are often longer, commonly around fifteen years and amortising over the hold, which suits a business buying premises to keep. Investment terms more typically run five to ten years, frequently with the option to fix the rate. Development facilities for expansion or new build are shorter and sized against cost and end value before clients move onto a term commercial mortgage.

Manufacturing was the largest occupier type in 2025 at around 33 percent of take-up per Savills, ahead of third-party logistics operators at around 31.5 percent, which reflects steady demand for production space and underpins both owner-occupier values and the rents on let stock that lenders price against.