There are various reasons why you may need to buy a commercial property, perhaps you are starting a new business, or buying an existing business linked with a piece of property (such as a hotel, restaurant, or retail space). Whatever your reasons, a commercial mortgage loan will help you to purchase the property you want. Commercial mortgages are also available for those who wish to expand their existing business. Commercial mortgage lenders are quite flexible regarding the purpose of your commercial mortgage; the loan can be used to invest in residential or commercial property, develop property, or acquire a remortgage on your current business property.
Commercial mortgages are generally repayable over a term of 15 years or more. Commercial mortgages can be obtained through most high-street banks and building societies. 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. Do bear in mind though, that as in the residential sector, bad credit mortgage loans incur higher borrowing fees, so you will need to factor the higher interest into your financial projections.
Most lenders will carry out an investigation into the company's accounts, business plan, and long-term financial projections of your company in order to ascertain whether your business is stable and profitable. This is done in order to for your lender to be gauge whether you are likely to default on your loan.
A commercial mortgage is a large financial responsibility, and lenders provide a number of mortgage types, offering different repayment options to suit a variety of financial circumstances. A flexible rate commercial mortgage is where lenders 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, where as you would expect, the interest rate will remain unchanged for a set period of time. After this time, the rate would increase to the lender's standard variable rate. This allows you to plan ahead with your budget because you always 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. If you'd like help finding the best possible commercial mortgage for you and your business, take a moment to fill out our short questionnaire. We will match you with a suitable qualified adviser from the SimplyFinance network, who will be able to give you advice and search the market for you to find the best deals.