Discover how we helped our client to navigate complex lending and application processes to successfully secure a commercial owner-occupier mortgage on a Post Office and store with residential accommodation.
At a glance:
- A doctor and experienced retailer looking for a new business venture
- Purchase of a Post Office and retail store, with residential accommodation
- The lender would only lend on a percentage of the freehold value, so an unsecured loan was needed to purchase the goodwill element of the business
The Case:
Our client had just returned from working abroad and was looking for a new business venture. With a family background in convenience stores, she wanted to purchase a retail business.
After viewing around 10 retail stores with low net profits, our client discovered a promising venture in a Post Office and convenience store that also included residential accommodation.
With a net profit of £46,500, the Post Office store offered a great opportunity for our client.
The Challenges:
This case came with several challenges, the biggest being that buying a Post Office isn’t like a typical business purchase.
Because they operate under a national contract, buyers must be approved as suitable operators before a sale can complete. The process is structured, meaning our client had to complete a formal Post Office application, attend interviews, and undergo mandatory training before the purchase could complete and they could officially take over.
All this naturally made the journey longer, so having a broker who truly understood the process was essential.
The funding structure also added complexity. The lender could only finance a percentage of the freehold value, but not the goodwill of the business.
Most lenders do not lend against goodwill because it isn’t a physical asset and has no resale value.
Consequently, we needed to secure an additional unsecured loan to cover the remaining amount. Bringing these elements together required careful planning and a clear strategy to keep everything moving.
Thankfully, our extensive knowledge made a real difference. We guided our client through each stage, ensuring the application was placed with a Bank Manager who not only understood the sector but had also previously run retail businesses himself. This meant our client was supported by people who genuinely understood the nature of the purchase.
With the detailed Post Office requirements and additional funding arrangements, the full process took around seven months, from initial instruction to the day our client finally began trading. Despite the complexities, our knowledge and experience allowed us to navigate our client through their journey and achieve a successful start to their new business venture.
The Finance:
Property value: £225,000
Gross loan amount: £168,750
LTV: 75%
Rate: 6.59% fixed for 5 years (mortgage), 8.95% (unsecured loan)
Term: 25 years (mortgage), 7 years (unsecured loan)
Monthly mortgage payment: £1,130.95 (mortgage), £337.38 (unsecured loan repayment)
Lender arrangement fee: £2,531 (1.50%)
Rates as at December 2025*
Next steps
Are you looking to secure a commercial or buy to let mortgage? Head over to our easy-to-use buy to let mortgage calculator to compare rates or get in touch with one of our expert commercial mortgage brokers.
