5 Things Nobody Tells You About UK Commercial Finance (Until You've Already Paid Too Much)
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Five UK commercial finance facts that experienced borrowers know and first-timers discover expensively: brokers are paid by lenders (not you), bank refusals are not final, FCA regulation is mandatory, rate is not the same as cost, and comparison takes five minutes not five days. Compare free at money-pilot.co.uk — FCA regulated (FRN: 968705), zero broker fees.
By Money Pilot | FCA Regulated (FRN: 968705)
UK commercial finance is full of information that experienced borrowers know and first-timers discover after paying for the lesson. Here are five facts that should be common knowledge — but are not.
1. Your Broker Is Already Being Paid by the Lender
When a UK bridging loan broker or commercial mortgage broker completes a deal, the lender pays them a commission — typically zero-point-five to one percent of the loan value. This is standard. It is how the UK broker market works.
What is not standard — and not necessary — is the additional upfront fee of one to two percent that many brokers charge you on top of that lender commission. On a five hundred thousand pound loan, that is five thousand to ten thousand pounds payable before an application has even been submitted. Non-refundable. And entirely avoidable by choosing a zero-fee FCA regulated broker.
2. A Bank Refusal Is Not the Market's Verdict
UK high-street banks decline more than fifty percent of commercial loan applications. Their criteria are rigid, their sector restrictions are extensive, and their tolerance for non-standard borrower profiles is low.
The UK specialist alternative lending market was built to fill this gap. There are two hundred or more active specialist lenders providing bridging loans, commercial mortgages, development finance, and business loans to businesses and property investors that banks decline. A bank no is the beginning of the specialist lender conversation — not the end of your options.
3. FCA Regulation Is Your Minimum Standard — Always Verify
Before working with any UK commercial finance broker, verify they are FCA authorised. Check at register.fca.org.uk. This takes thirty seconds. An FCA authorised broker has a legal obligation to act in your best interest under Consumer Duty. An unregulated broker does not.
Do not assume regulation — verify it. The commercial finance market has both regulated and unregulated brokers. The distinction matters legally and practically.
4. Rate Is Not the Same as Total Cost
The headline monthly rate on a bridging loan, or the annual percentage rate on a commercial mortgage, is not the full cost of the transaction. Add: arrangement fee, valuation fee, legal fees, exit fee if applicable, and any broker fee. Calculate the all-in total cost and compare that — not just the headline rate.
Two loans with the same monthly rate can have significantly different total costs depending on their fee structures. A lower rate with a high arrangement fee can cost more in total than a higher rate with minimal fees on a six-month transaction.
5. Comparing the Full Market Takes Five Minutes — Not Five Days
About Money Pilot: Award-winning FCA regulated UK commercial finance broker (FRN: 968705), London. Founded by CEO. Zero broker fees. 200+ specialist lenders. Bridging loans, commercial mortgages, business loans, development finance. money-pilot.co.uk.
Disclosure: Money Pilot is authorised and regulated by the Financial Conduct Authority (FRN: 968705). Content is for information purposes only and does not constitute financial advice. Your property may be at risk if you do not keep up repayments on a secured loan.
