A commercial mortgage allows you to purchase the premises you currently lease or if you are looking to expand to a bigger location. Alternatively, it can help you refinance your business to fund growth and additional projects.
Generally, the mortgage period will be for 10 years or more and the premises will be at risk if you are unable to keep up your repayments. The majority of mainstream lenders offer commercial mortgages but it is important you can meet their criteria.
Typically lenders are looking for:
- Clean credit history – although an adverse credit history is often no longer a barrier
- Suitable deposit
- Business accounts and / or projections
Things to consider:
- Rates: As with residential property, mortgages can be fixed or variable.
- Fixed rates are typically between 2 - 5 years and provide payment stability.
- Variable rates allow you to take advantage of reductions in the base rate but also mean that repayments can increase if the base rate increases.
Repayment is often suited to investors using the property as an alternative pension plan or looking to build a small portfolio as they have certainty that the mortgage will be repaid at the end of the term.
Interest only repayment is more popular with professional landlords and property investors as it allows them to have the cash flow to continue to grow their portfolio.
If you want to discuss the options available to you give us a call, send us an email or use our contact form and one of the team will get back to you.