What is Commercial Mortgage?

      A business loan obtained by mortgaging a commercial property such as business premises, shop, restaurant, office, pub etc is Commercial Mortgage.

Purpose of Commercial Mortgage

      Commercial mortgages have multi-factorial purposes. They can be used to buy business premises, such as offices, shops, restaurants, or pubs. Apart from running the business, the loan can be used for creation of immovable assets such as land and building and movable assets such as stocks, plants and machinery. It can also be used for the expansion of business or investment in commercial lands. It can also be utilized for acquiring commercial assets for new or existing business.

Terms of Mortgage Loan

      Normally commercial mortgages are long term loans. Generally they are available at a lower rate of interest unlike unsecured business loans. Hence, such loans are useful for all types of business financing requirements.

Commercial Remortgage

      Availing business loan by mortgaging already mortgaged business premises is known as Commercial Remortgage. Through commercial remortgage some of the equity that is currently tied up to the commercial property is unlocked. If the company’s credit rating is high then it is possible to get cheaper remortgage, if the business has already improved by the original mortgage. Hence, it is helpful to create more competitive scenario.

Uses of Commercial Remortgage

     The equity freed up through a commercial remortgage can be used in many ways for business purposes such as for creation of movable and immovable properties, expansion of business, repayment of other borrowings etc.

     Some typical uses for a commercial mortgage or remortgage are borrowing money to buy a shop, raising finance to purchase an office building, buying a pub, financing the purchase of a restaurant buying a hotel, buying a house to convert to a Bed & Breakfast (B&B), raising finance to buy an existing business, clearing a business overdraft, improving business cash flow, buying new plant or machinery, financing the purchase of company vans and other vehicles, borrowing money to buy extra stock for your business, funding the expansion or refurbishment of your offices, borrowing money to pay for training and buying land for business purposes.