How to Avoid Commercial Mortgage Declines

Securing a commercial mortgage can be challenging, and many applications get rejected due to various financial and business-related factors. In this blog, we explore the top reasons why commercial mortgages are declined and how to overcome them.

March 28th, 2025

How to Avoid Commercial Mortgage Declines

The real reasons why commercial mortgages get declined – and how to avoid them

How to Avoid Commercial Mortgage Declines

When a commercial mortgage is declined it often comes as a surprise to the applicant.

There are many reasons for this, often down to wrong expectations or an assumption that applying for borrowing is all about justifying affordability.

The fact is that the main reason why commercial mortgage applications are declined has little to do with the financials and more to do with the lender you applied to.

We have a saying that you can almost always borrow, it is whether the cost makes it worthwhile. That balance is key.

Survey & The Facts on Mortgage Applications

Have a look at these figures from the 2025 NACFB survey. The survey asked lenders why they declined lending applications, it also asked brokers why applications were declined.

There is a key difference here, within it is the key to why some commercial mortgage applications get declined and why the message as to ‘why’ is lost.

Why Brokers Think Applications are Declined

The top few bars are probably as expected:

Lender thinks the application was too risky
Poor credit history
Reduced lender appetite

The list reads as many would expect, it is the general consensus.

But, let’s compare that to what lenders say.

Why Lenders Decline

Number one by a long way is that the application was always outside of their criteria. What does that mean?

It means that the application was too risky, maybe the client credit was not good enough, they had too much other debt or the sector was wrong for them.

It is not saying that the application was not good enough, it is saying that it wasn’t the application for them.

Translate this as; it was the right application for another lender.

Getting a commercial mortgage can be challenging, but understanding why applications are declined helps you prepare better. By addressing credit issues, financial stability, business planning, and property valuation, you can all improve your chances of approval and secure the financing you need.

If your mortgage was declined, don’t get discouraged—review the rejection reasons, fix the issues, and reapply with a stronger case.

But, the big key issue is all about: Making the right commercial mortgage application to the right commercial mortgage lender.

Remember that we work with lenders all day, every day and can save you the time and hassle by getting you to the right lender first time. It is what a good mortgage specialist does.

David Farmer

Over 30 years finance experience. Former credit underwriter, founder of Lime Finance Solutions in 2012. Multi Award winning business, featured in Sunday Telegraph, Parliamentary Review, Sky TV and others. Regular contributor to press and business associations. FCA Authorised, ALIBF Qualified. Specialist in Commercial Mortgages, Business Lending, Property and Development Finance.