If you’re looking to grow your business, or the cost of renting for your commercial premises has become too expensive, you may be considering investing in a commercial property. As you start exploring the range of commercial mortgage options on offer as a potential source of finance, you’ll quickly realise that there’s a lot to be aware of. This is where we come in.
There are two types of commercial mortgages:
- Owner-occupier mortgages – for buying a property that will be used as trading premises for your business.
- Commercial investment mortgages - when you are looking to invest in commercial property to let it out to a third party for rental income.
When do you need a commercial mortgage?
- You may consider investing in a property either because you are planning to expand your business or you want to cut the cost of renting for your commercial premises.
- You may want to raise capital for business purposes including expanding your portfolio, modernisation, investing in new assets or reorganising your finances by consolidating more expensive loans.
- Commercial mortgages can also assist when the mainstream Buy-to-Let lenders are not able to help. If you are an investor or a developer who has struggled to go down the traditional mortgage route due to, for instance, unusual property types, lease issues or ownership rights, you may benefit from the various lending options commercial mortgages can offer.
There are numerous advantages of owning your own business premises:
- The interest payments on your commercial mortgage are tax deductible
- If the property increases in value, your business capital could also see an increase
- You may be able to sublet any spare space and generate additional revenue
- Commercial mortgages sometimes offer either tracker or fixed-rate options, meaning that you can be financially better off whilst benefiting from the increased stability that property ownership provides.