If you are a business owner seeking to purchase your companies commercial property base, then there are a few basics that you need to bear in mind.
You will invariably require a commercial business loan. Industrial finance and business loans exist to aid investors and corporations, when attempting to obtain all types of commercial property.
There are plenty of common attributes between business and home loans, all loans will have a similar inherent premise – a lending institution will grant you the funds to get an investment and utilise the real estate for collateral should the borrower fail to make re-payments.
A guarantee will often be required and at times cash collateral alone is not sufficient to totally satisfy a business lending institution. If you are seeking to borrow on behalf of your business, it is feasible that either yourself, or the directors of the business will have to give personal guarantees to a lender. This can often involve directors placing their homes up as surety on the loan.
Commercial financing contracts tend to be planned differently to residential mortgages. Despite there being some clear similarities between residential and commercial mortgages, the loans are actually created in a different way. For example, you cannot usually take a commercial loan on an interest only contract, as this is too much of a risk to the lender.
Another difference, is the fact that payments on a commercial property mortgages are due on a quarterly basis, meaning payments are made every three months, rather than on a monthly basis. Details like this must be taken into account when you are arranging your annual cash flow.
A major positive of buying your own commercial property, rather than renting, is the fact that you will no longer be exposed to any sudden rises in rental prices and can budget accurately for the long term.
