The Advantages of a Commercial Mortgage
Mortgage Options
Buying commercial premises is often a prudent investment and having your own property can be a major business asset. However, while there can be advantages of doing so there can also be some significant disadvantages too.
Why a commercial mortgage?
A commercial mortgage for property can be used to buy your business premises and the repayments can be structured either with fixed or variable interest rate payments. However, this type of mortgage can be used for more than just buying your business a new home. It can also:
- Develop existing property
- Develop new property
- Extend current premises
- Residential developments and projects
- Commercial developments and projects
- Buy land
Owning a commercial property has its benefits including:
Lower interest rates
Commercial property mortgages typically have lower interest rates than other unsecured borrowing. Choosing to have fixed monthly repayments means you can accurately use them in your business planning and forecasting, enabling you to structure the finances of your business with a bit more certainty.
Capital gains
Substantial capital gains can be made you when buy a commercial property. This can be a good way of realising capital growth over a long period as (long term) property prices always rise.
Renting potential
If you have any additional space in or on the property you own you can monetise it by renting out the surplus space to generate additional income.
Financial planning
Commercial property mortgage payment plans usually extend for a number of years which allows a business to focus on other important business matters such as sales, monitoring overheads and training staff.
No 'empty money' rent payments
Your mortgage payments will probably not cost you any more, per month, than what your equivalent rent would be. But as you own the building, your equity in the property will continue to grow with each mortgage payment, providing you with a more solid financial foundation.
Capital gains
Long-term property prices rise and buying your own premises is a form of investment - so long as the area you are buying in is right. Business property prices can often rise quickly in a short space of time, making your investment a shrewd one.
Ending a mortgage
If you find yourself unable to pay your mortgage, or you need to move to bigger premises, or if you decide to close your business, you are still left with plenty of options if your mortgage is commercial. While getting out of a long-term leasing arrangement can often be difficult, a mortgage can still be covered if you decide to sell the premises or if you decide to rent it out and maintain the asset.
Source: accesscommercialfinance
Financial Capital Group, LLC is a lender that provides home and commercial finance solutions for business, professionals, individuals and families since 1999. Our love and care for others is directed as much within our walls as it is outside of them. Our desire is to work together to meet the needs of our customers.
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