Secure a Commercial Entity
What is a Commercial Mortgage?
A Commercial Mortgage is a loan that is secured against a property which is not currently owned by you.
Buy-to-let mortgages are slightly different as they are a higher volume commercial mortgage which is presented to a volume market.
When it comes to a commercial mortgage there are no set rates, this means that every single application that is submitted to a lending manager is reviewed thoroughly as they look into the risk levels.
On average a commercial mortgage will last from 3 to 25 years, if you are in the market for a shorter-term loan then you might need to look at a bridging or development loan.
Commercial mortgages are aimed at businesses that are looking to purchase a property or to release value from an existing building which could then be invested into the business.
Mortgage Loans can be divided into two categories:
Owner-Occupier mortgages: This is used to buy property that will be used as
trading premises for your business.
Commercial Investment Mortgages: This is used for property you are planning to
let out.
Advantages
- There is no scope for rent increases
- There is a chance that you can sub-let free space in the building (you will need
- permission from the lender)
- You are able to add, change and decorate as and when you please.
- The interest payment on a commercial mortgage is tax-deductible
- If the buildings value advances, then your capital will also increase.
Disadvantages
- As you are essentially buying a building, you are required to pay a considerable deposit which might be suited elsewhere in your business.
- If you were to relocate in the near future moving may be more difficult as you will be removing yourself from the confirmed rental agreement.
- It is your responsibility to look after your building, if there are issues such as maintenance or fixtures then you are in charge of fixing them.
- If your commercial mortgage is variable then you are opened up to interest rates Increasing.
- If the building loses value, then your capital will also decrease.
A COMMERCIAL MORTGAGE CAN BE A GREAT WAY FOR YOU TO UTILISE YOUR CAPITAL FOR BUSINESS DEVELOPMENT AS OPPOSED TO TYING UP ALL YOUR CAPITAL WITHIN YOUR PROPERTY. WHY NOT GET IN TOUCH WITH US AND SEE HOW WE CAN HELP YOU TO GET THE BEST POSSIBLE RATES IN THE QUICKEST TIME.