A commercial mortgage or commercial remortgage is a business
loan which is secured against a commercial property.
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.
As well as being a useful way of financing the purchase
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 property 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 benefit from
remortgaging.
A commercial remortgage allows you to unlock some of the
equity that is currently tied up in your commercial property.
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 through a commercial remortgage can
be used for all sorts of things for your business. For example,
you could purchase additional stock, or invest in new machinery
or other fixed assets such as vehicles. Another use for
the extra money can be to pay off outstanding 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 purchase an office building
- Buying a pub
- Financing the purchase of a restaurant
- Buying a hotel
- Buying a house to convert 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 purchase of company vans and other vehicles
- Borrowing money to buy extra stock for your business
- Funding the expansion or refurbishment of your offices
- Borrowing money to pay for training
- Buying land for business purposes
About the Author
David Miles edits a number of finance websites, including
TheCashClinic.com
- a UK Personal Finance Portal.
