A commercial mortgage or commercial remortgage is a business loan which is secured against a commercial character.
Commercial mortgages are often used to buy business premises, such as offices, shops, restaurants, or pubs.
But they can also be used to buy other business assets such as plant or machinery.
in addition as being a useful way of financing the buy of business premises for a new business, commercial mortgages can also be an excellent way of funding the expansion of an existing business.
A commercial mortgage can also be used to fund investment in land or character which will be used for commercial purposes.
A commercial mortgage can be used to buy most types of commercial buildings, such as shops and offices, for both new and existing businesses.
The interest rates on commercial mortgages tend to be lower than the interest rates on unsecured business loans and the repayment terms are usually longer. This makes them useful for all sorts of business financing requirements.
What About a Remortgage?
If you already have a commercial mortgage on your company’s business premises, you might find you could assistance from remortgaging.
A commercial remortgage allows you to unlock some of the equity that is currently tied up in your commercial character. It could also be a chance to switch to a more competitive, cheaper mortgage, especially if your or your company’s credit rating and business history have improved since you took out your original commercial mortgage.
The money you free up by a commercial remortgage can be used for all sorts of things for your business. For example, you could buy additional stock, or invest in new machinery or other fixed assets such as vehicles. Another use for the additional money can be to pay off noticeable bills, or clear other borrowings such as the company’s overdraft.
Here are some typical uses for a commercial mortgage or remortgage:
- Borrowing money to buy a shop
- Raising finance to buy an office building
- Buying a pub
- Financing the buy of a restaurant
- Buying a hotel
- Buying a house to transform to a Bed & Breakfast (B&B)
- Raising finance to buy an existing business
- Clearing a business overdraft
- Improving business cashflow
- Buying new plant or machinery
- Financing the buy of company vans and other vehicles
- Borrowing money to buy additional stock for your business
- Funding the expansion or refurbishment of your offices
- Borrowing money to pay for training
- Buying land for business purposes
Further information on commercial mortgages and business loans can be found at the Online Commercial Mortgages website.
Copyright 2004 David Miles. You are welcome to copy this article on your website, so long as it is published “as is” (unedited) and with the author’s bio use (resource box) and copyright information included. In addition, all links to external websites must be left in place.