Commercial Mortgage Loan – Why Would You Need One?
There are a number of reasons why you might be seeking a
commercial mortgage
loan.
- The most usual reason is for purchasing commercial property for the use of a
business. This may be either for a new business start-up, or for an existing
business that has outgrown its current premises. If it is for a new business
start-up, you may be looking for a pub, hotel or restaurant; a retail outlet or
takeaway; or a manufacturing unit. Alternatively, if you already have a
property, you may find that your existing premises are no longer big enough and
you need a larger property. This kind of commercial mortgage loan is likely to
be for about 15 years and will almost certainly be secured on the property
itself.
- An increasing number of people are deciding to purchase commercial property
for investment purposes. This sometimes seems a more attractive investment than
residential property, because of its higher yields and a more stable market. If
you are looking to buy commercial premises for this purpose, you really need to
seek a special commercial investment mortgage. The lender will need to give
particular consideration to such factors as the length of the lease you are
considering, the quality of the tenants and thee projected income.
- You may wish to
remortgage in order to take out additional money from the
business. Of course this is something you need to consider very carefully. You
need to use professional help to carry out careful projections of future income,
to ensure you will be able to afford the increased payments.
- Many expanding businesses find that they are exhausting their working capital with financing additional stock, work in progress and cash-flow problems caused by late-paying customers. The most efficient way to raise additional working capital is via a commercial mortgage loan – assuming you have the collateral. You may be able to secure one of these loans on your inventory or revenue, as an alternative to the building itself.
Whatever your reason for seeking a commercial mortgage loan, your best plan
is to consult a commercial mortgage broker. There are an increasing number of
lenders in the market and many of them specialise in specific business sectors.
You need to find the lender who is most appropriate for your particular
requirements.
Please note that the FSA do not regulate commercial loans or commercial mortgages
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