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Explaining Commercial Mortgages
There often comes a time in business when you want to maximize your company's financial assets. Taking out a commercial mortgage is one way to accomplish this. If you want to invest in or buy a commercial property for the purpose of starting a new business or buying an existing business linked with a piece of property (such as a hotel, restaurant, or retail store), a commercial mortgage loan will help you purchase the property you want.
Commercial mortgages are also available for those who wish to expand their existing business. Also, the money from your commercial mortgage can be used to invest in residential or commercial property, develop property, acquire a remortgage on your current business property, or to repay outstanding debt, arrears, or CCJs.
Commercial mortgages are generally repayable over a term of 15 years or more. Your lender will require security before they issue the loan, and this security usually comes in the form of the property itself. Commercial mortgages can be gotten from any bank or building society. Even if you have poor credit history, there are some lenders who will offer you a commercial mortgage based on the credit value of your business.
Some lenders will do an investigation into the finances, business plan, and long-term financial projections of your company in order to ascertain whether or not your business is stable and profitable. This is done in order to for your lender to be sure that there is a high likelihood that
you will not default on your loan.
A commercial mortgage is a large financial responsibility, and lenders are aware of this. Accordingly, they provide a number of services and conveniences to allow your repayment to go smoothly. One such convenience is that lenders often allow payment holidays of up to two years in three month increments. This allows you to take a break from payments if your budget becomes a little tight for a short period of time. Another option is to take a fixed rate commercial mortgage. With one of these, your interest rate will remain static for a set period of time. This allows you to plan ahead with your budget because you will know what your monthly payments are going to be.
The main categories of properties that are eligible for commercial mortgage loans are country properties, health industry properties, investment properties, leisure properties, professional properties, retail properties, and healthcare properties.Some types of commercial properties for which additional security may be required when taking a commercial loan are cafes, factories, shops, offices, residential investment properties, warehouses & light industrial units, guest houses, public houses, B&Bs, wine bar restaurants & take-aways, boarding kennels, riding schools, Bookmakers, accountants, architects, solicitors, and retail properties which include antiques, auctions, art galleries, bakers, bookshops, car showrooms, butchers, beauticians, clothing, dairies, DIY, department stores, dry cleaners, financial institutions, food stores, footwear, funeral directors, garages, gift shops, furniture, garden centers, grocers, hire shops, hairdressers, leisure centers, newsagents, nurseries, office equipment, off licences, record shops, pet shops, sports shops, supermarkets and toy shops. A few types of commercial properties for which additional security is not required when getting a commercial loan are development properties, amusement parks, snooker halls, bingo halls, cinemas, sports complexes, and leisure centres.