What is a commercial mortgage?
A commercial mortgage is essentially a loan taken out against your property or land. It could be said that commercial mortgages take over where a typical loan ends. By using property as the collateral, commercial mortgages allow lenders the security to offer larger amounts of money than would be available via other loan types. This is because they reduce the risks to themselves whilst giving your business greater financial room for growth.
Although similar, commercial mortgages do work slightly differently from a regular mortgage as there are no fixed rates and they usually have higher interest rates. The repayment terms can vary from 3-25 years and this can depend on size and value of the property.
Commercial mortgages can be offered for most legal businesses.
How does a commercial mortgage work?
The same way home owners can get a mortgage for their house, business owners can get a commercial mortgage for their business. If you are considering buying land or a property for your business then a commercial mortgage could be for you. A commercial mortgage is very similar to a residential mortgage in that you will require a deposit first and then continue with monthly payments. The deposit is usually around 30% of the total value. Commercial mortgages have no fixed rates and typically have higher interest rates. The terms of the mortgage can vary business to business so Parkins Finance will advise you on reaching the terms that are most manageable and beneficial to your business.
What is a commercial mortgage good for?
A commercial loan could be suitable for your company if you want to access larger sums of money than available via other loan types. By using your property as the collateral, commercial mortgages allow lenders the security to offer you larger amounts of money than would be available via other loans. A commercial mortgage is good if you want to take the next step for your business and get your own premises. It can also be a good option for you if you are wanting to refinance and release equity that will be injected back into your business. You can get a commercial mortgage for land, property or even another company. If there are assets to secure against the loan then a commercial mortgage is an appealing option for accessing funds for your business.
Why should I consider a commercial mortgage?
There can be a lot of benefits for your business taking out a commercial mortgage. It will allow you to access larger sums of money than a lot of other loans. If your property increases in value then so will your capital and the interest payment on a commercial mortgage is tax-deductible. A commercial mortgage could be right for you if you are looking to own a property or if you are looking to release the value of your existing property. Here at
Parkins Finance our financial brokers have expert knowledge on commercial mortgages and can advise on how to move forward with the process. If you are considering a commercial mortgage in Scotland, then we are happy to help you work out how to make the best financial decision.