A Bit More on Commercial Mortgages
Whether you are looking to buy a new building for your business or to release some equity from your current one, a Commercial mortgage will most likely be the product you need. Similar to a traditional Residential mortgage, cash is borrowed and secured against a property. Whilst, the Commercial market is much smaller than the residential one, it is growing in popularity, particularly as more people look to expand their businesses or have simply realised that the cost of renting has become too great. Commercial mortgages are used by business owners for a few reasons; to purchase a business property for their own business use, to buy it as a rental opportunity, or to unlock the equity within already owned in the building. Generally speaking, Commercial mortgages are usually a long-term loan, often around 20 years, however a lender will typically only fund up to 70% of the business property value, leaving the purchaser to come up with the additional funds to complete the purchase.
By owning your business, you are reducing the risk of rent increases, all the while benefitting from building equity in the likely event that the property price increases over time.
There are numerous other benefits to choosing a Commercial mortgage:
Consolidate business debt
Purchase latest equipment
Cheaper monthly cost than renting
Opens up an opportunity of sub-letting for additional income
What Tailored Money Can Do. Commercial mortgages are definitely a slightly more complex type of lending and with many lenders out there, it is vital you have access to a specialist who knows and has access to the whole market. Whether you are acting alone or as part of a broader business enterprise, our Commercial mortgage lending experts view every case individually and work with you to find a deal that suits your specific requirements.
Understanding How It Works. As a potential borrower, you should know that you will be subject to financial checks. In the same way as Residential mortgages, this is done simply to ensure the monthly figure agreed is sensible for your financial situation. Checks will likely be done on your accounts or tax returns dating back a couple of years, your business figures along with projected growth plans, bank statements for proof of income and any details of current business partners.
Your credit history will play a part in whether your application is successful or not, however this isn’t the only consideration. If you have a solid picture of your company and a proven business income you should still push forward with your plans and let our specialists explore the market for you.
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