Commercial Mortgages for Childcare Businesses

With more and more parents working, childcare is a necessity for so many working families with demand for nursery places high across the UK.

Exceptional nursery care that ‘has it all’ is increasingly in demand - this being due to modern times with both parents working full time and a lot of mothers going back to work early. This marries with the desire for exceptional care, from all parents, for their children. As such, the nursery world has continued to evolve over the years to cater to the demand, we have seen new purpose-built centres replace small converted houses and an influx of new operators looking to establish themselves in the sector.

OFSTED , CIW and The Care Inspectorate as the childcare regulators for England, Wales and Scotland provide the framework for nursery operators to follow within their operation to ensure optimal care is provided to children under their supervision. Most parents will only entrust nurseries that have been rated ‘Good’ or ‘Outstanding’, even if it means paying a premium for this service.

We have seen an increase in Forest Schools and nurseries with access to woodlands and farms to bring children closer to nature and encourage their creative minds from a young age. Operators are increasingly looking at innovative ideas to enhance the childcare experience.

However, the demand for quality childcare settings still outweighs the supply, hence the demand and long waiting lists for D1 use buildings, particularly by existing operators. The shortage of prime location real estate is leading existing operators to convert large buildings into nurseries, as well as creating the option of purchase-built centres. 

Lender Appetite 

Childcare as a sector is increasingly becoming a favourite with lenders, however, the ‘30 Hours Free Childcare’ initiative introduced by the Government has diluted the profitability in this sector, especially for operators with single settings. The sector has always worked on lower margins due to high staffing costs and the gap in Government funding has led to the closure of some smaller settings, whilst operators with larger, multiple settings have covered the deficit through ‘top ups’.

Whichever option you have in mind, Christie Finance will help you get the funding you need to purchase or lease the child care setting you want.

Childcare property loan features

The terms of a commercial loan against a childcare property will vary considerably from lender to lender but, as a general rule, the following may apply:

70% - 100%
LTV, subject to status
65% LTV or higher
on leasehold sites for experienced operators
year mortgage term

Key Factors to Consider for Your Loan Application

When you are thinking about buying a business there are various things that both you and a potential lender will need to consider: 

  • Experience – do you have the right level of experience to run the business? How will you run it?
  • Performance – how well is the business doing? Is it in a good location? Is there enough profit in the business to be able to repay a loan easily and personally benefit from?
  • A deposit of 30% or more
  • Good credit history
  • Two years' trading accounts and income projections
  • Strong proposal from Christie Finance
  • Additional security
  • Business plan
  • Proof of experience

Our commercial mortgage services

We’ve been helping first-time buyers and existing business owners secure funding for over 45 years.

What makes Christie Finance different?


National coverage across the UK

Project management

From intial enquiry to completion - saving your precious time and money

Quick responses

Rapid business and commercial mortgage decisions

Relationship - C&Co

Our brokers can access the best new businesses for sale

Specialist knowledge

Over 40 years experience in our specialist sectors

Tailored loan options

Fixed and discounted rate available

The 'Christie' name

Adds credibility to the proposal - buying you a better deal

We are independent

We have no tie to any one lender

Find out more about commercial mortgages