All you need to know About Commercial Mortgages – do you want to expand your business? Have you realized that rental costs have become so high? If this is the case, then you definitely need to try out commercial mortgages which can provide various business finance options. Here is basically what you need to know.
What are commercial mortgages? – These are loans used for buying or refinancing any land or property for purposes of business. Sherwood Mortgage Group provides a commercial mortgage broker in Ontario, ON The loans can also be used for expansion of existing businesses and for development of residential or commercial property. Businesses secured to a property usually become the principal resource for financing the development of any business.
A smaller market share is represented by commercial mortgages compared to residential mortgages albeit having a disproportionately higher value. Commercial mortgages, unlike residential mortgages, provide financing in four distinct ways. They are: Buying business premises, securing land development ventures, developing an owner-occupied business and adding to a buy-to-let portfolio.
The structure of commercial mortgages is tailored such that it suits both the borrower and the lender. What the lender wants to see is security on the loan whilst on the borrowers’ side; they want to get benefits arising from reduced repayments.
Commercial mortgages are usually long-term loans that give cash to buy business premise/premises. What is typically lend by the mortgage lenders is usually 70% of the property’s value, which leaves the business to fund its growth by paying its regular mortgage payment and making use of any working capital.
Commercial mortgages only offer up to 70% of the property’s total value, which means that to complete the purchase, the business will have to find the rest of the money and this is basically what is in the lender’s mind. The remaining amount is often a substantial amount of money to raise.
Long-Term Benefits of Commercial Mortgages – more can be done by commercial mortgages than just housing your business. As an own business owner, you greatly reduce the risk of having to deal with increased rental charges. Your business can be future-proof thanks to Toronto broker commercial mortgages as they allow it access to equity as the value of the property increases over time.
Choosing commercial mortgages has numerous benefits and many of these benefits always seek to provide funding and finances for the future. They include: release capital for investment and growth, buy new equipment, expand trading, consolidate business debts, option for sub-letting or leasing parts of the property to create a subsidiary income and it is cheaper than renting.
Commercial mortgaged have really become an increasingly easy and flexible way that owners can use to finance purchase of property as long as there are tangible assets that can be used to secure against.