If you operate a business that relies on a brick and mortar location, you may start out renting but at some point you will need to decide whether renting is really your best option or if you should get a commercial mortgage. The answer to this question depends on a number of factors including how much space you need, the type of property that is most suitable for your business, cash flow etc. But if you think that getting a commercial mortgage might be right for you, there are many advantages.
What is a commercial mortgage?
Let’s start with defining exactly what a commercial mortgage is and what it can do for your business. Just like a residential mortgage, a commercial mortgage is a loan that may be used to buy a premises. But it can do much more than that. Commercial mortgages can also provide the necessary cash to develop your business property, extend the property you already have or to purchase land.
What are the benefits of a commercial mortgage?
Commercial mortgages have several advantages over other types of loans. For starters, they tend to have lower interest rates than other types of unsecured business loans. And if your monthly payments are fixed, it allows you to can accurately plan and forecast your budget. Besides that, your payments on a commercial mortgage will often not be any more than you would typically pay in rent.
Another advantage is that the value of property tends to go up. Owning your own commercial premises rather than renting can set you up to achieve some pretty impressive capital gains over time. So if someday you decide to sell the property, it is likely that you will see a profit.
Compare this to renting, where all the money you spend goes to pay for someone else’s property investment. And speaking of renting, if you have more space than you need for your own business, you can always rent out the additional space to other businesses and earn more revenue.
The other main advantage of a commercial mortgage is that it is easier to get out of than a long term business lease agreement. If you decide to go out of business or if you need to move to a bigger space because business is booming, you can choose to rent out your space or to sell your property and your mortgage will be covered.
If you think you might be ready to get your own commercial mortgage, call Akal Mortgages today and a member of our team would be happy to discuss your options with you.
When we say YES! We stand behind our promise.®™