Commercial Mortgages, Commercial Property Finance and Loans.

A Commercial Mortgage operates on the same principle as a Residential Mortgage in that the commercial property is offered up as collateral against the mortgage loan.

Primarily for the use of business or commercial interests, the commercial loan may be used to purchase business premises, or for a further property extension of that business.

But a Commercial Mortgage it is not solely restricted to the purchase of commercial property. The loan may be used to finance business development or for any other purpose which may be advantageous to that business, including a Buy-to-Let facility for any prospective landlord.

When the purpose of the commercial loan is solely for the provision of finance for the operational or start-up costs of a business, the lender can arrange refinancing of the existing mortgage so that allowance is made for the additional funds required.

Commercial Mortgages tend to be offered over longer periods than residential loans, often for up to 30 years. This is especially attractive to new businesses, effectively reducing initial outgoings by allowing them to make smaller repayments over a longer period.

One of the main advantages, however, is that the interest on a Commercial Mortgage is usually tax deductible and any subsequent net proceeds of the loan will not be assessed as taxable income. There are other benefits, but it would be wise to have an accountant examine the fine detail of any agreement to ensure that the offer matches the borrower’s needs and requirements satisfactorily.

A good credit history, well kept and organised business records and a reasoned projection of business development will all aid approval of any application and allow the best terms to be offered by the lender. There is certainly a possibility that there will be more complexity attached to the negotiation than with an ordinary Residential Mortgage, and we would advise speaking to one of our specialist Commercial Mortgage brokers from the outset.