When people think of commercial property they usually think of renting immediately. Not many business can actually afford to buy out their property fully paid for. Commercial property has the same dilemma as residential property where the mortgages may seem too expensive. That’s where a commercial mortgage broker can come in handy and help give you advice and guidance as to whether or not a commercial mortgage could be an option for you and if so what would be the terms and requirements around this. Here are some of the services these people offer and how it can help your business.
Similar to when you are looking to purchase residential property you may use a loan / mortgage calculator. This mechanism immediately lets you enter the value of the property you are looking to purchase and the expected mortgage monthly payment you would be expected to pay as a result. The more you enter for the deposit and the longer the terms clearly reduces the monthly payment significantly. The mortgage broker will help you with this element as although you enter exactly what you are looking for, this is not an acceptance mechanism and only a guide. You need to make a formal application to get a credit check completed in order to be formally accepted. This also leaves a footprint on your credit file.
If you are not swimming in cash or have enough funds to make the minimum deposit amount then this could cause you problems immediately. In order to minimise the risk to the lender, clearly they would want as much deposit as possible made. In addition to this, they would want to understand your business cash flow history. Clearly they need to be reassured that before any lending is completed the business has a good sound history and there is nothing changing moving forward to give them confidence that you would be able to afford the monthly payments. Again, this is definitely something the advisor can assist with to ensure that you are not stretching yourself and that you have taken different scenarios into account to minimise risk.
Purchasing any property is a great asset and will immediately increase the value of your company. This is similar between both residential and commercial property. The first step on getting on the property ladder is usually the most difficult. When you complete your end of year finances, the property value helps with being one of the most valuable assets, especially if there is no debt connected to it and it is paid outright.
When others know that you own the property that you are trading from it gives them a certain image of your company success. People know how difficult it is to get to this stage therefore if you have purchased the property they will sometimes conclude that the business has a good successful history which in turn can help your trading and growth moving forward.