Commercial mortgages generally take over where business loans finish. Business loans up to £25,000 are unsecured, but for larger amounts lenders need security in order to reduce the risk to themselves. Because of the legal and administrative costs of taking security on commercial property it is considered uneconomic to borrow under £50,000 this way, and some lenders have a minimum of £75,000 or more.
Generally lenders take the property you are buying as the only security for the loan, which is typically 70% of the value of the property, and ask for a cash deposit for the balance of the purchase price. If you don’t have the cash you can offer the lender additional security, which is typically other property which you have considerable equity in, but could be a charge over other assets such as an insurance policy or shares.
Not the type of finance product you require
Click below to see our range of products
Commercial mortgages are typically from 3 to 25 years. Shorter term finance is also available and this may be called a bridging loan or property development loan, which you may have from a few weeks up to 24 months.
Are all commercial mortgages variable rate?
No, but most are. Typically a rate will be quoted as X% over base or LIBOR, and this in residential terms would be called a tracker mortgage. Fixed rate mortgages are available and for amounts under £500,000, where the lender takes the rate risk themselves, they may be advantageous. But mortgages where the lender passes the risk on to the borrower by using a “Swap” contract are best avoided. These complex derivatives are not suited toSME borrowers.
MAXIMIZE THEIR FULL
Take Advantage Of The Moneycornershop.com Renewal Date Service. Do Not Miss Out On Great Savings On Insurance, Utilities and Commnications. Work Smart the Moneycornershop.com Way
We Give All New Customers Who Purchase From Moneycornershop.com a £25 Gift Voucher!
PLEASE QUOTE MCS 11
Let's Make Change For The Better!!
Start Your Quote Now