A Business mortgage is a great way to get your own property for your company and sometimes at a better rate than at your usual residential products. With a business mortgage the lender may take into account the value of the business and it's profits as well as the property that business is buying. This means a business mortgage can sometimes be better value at great rates helping to keep your business profitable.
A business mortgage can be obtained by going direct to a mortgage company however sometimes it is better to go through a mortgage broker for a business mortgage because they are able to find something which is suited to your type of business market. Here at Bournemouth finance we have experience in finding mortgages for businesses. Our business mortgage approach allows us to search the whole market enabling us to propose a number of different solutions for you based upon the latest changes in the mortgage market rates.
Speak to us about a business mortgage today, why not fill out a free call back request and we will be in touch to discuss your requirements, or if you prefer to learn more have a look below for more information aboout business mortgages.
Business Mortgage - The Basics
Business mortgages are different to normal residential mortgages, they also take into account the business that is contained inside the building that will be paying for the property or mortgage that is tied to that property. Each business mortgage will be assessed independently. To decide if your business is suitable for a business mortgage it is advisable that you speak to us about the type of business that you run and the sort of turnover it produces which will help determine the sorts of business mortgage products that will be available to you.
Business Mortgage - Funding
In some cases it is possible to find or obtain funding for your business mortgage. For this to happen you need to speak to an adviser to see if you are eligable for any of the current government grants. Each case would be assesed indidually to see if it fits with the lenders criteria. Business mortgages can be complex and it can take a lot of time to fill out all of the necessary paperwork to apply for a business mortgage, let alone applying for funding ontop. We can save you a lot of time by taking the stress out of this process and supply you with the advice you need to make the right choice about your business mortgage product. For a business mortgage we would work with a network of lenders who may have a preference with the types of businesses they deal with, we can advise the ideal business mortgage based upon this criteria.
Business Mortgage - Securing the Mortgage
Business mortgages are more complex and the mortgage may also be secured against the business as well as the property. The rates which you are charged may also change depending on the profitability of the business, if the business is losing money then it may have a negative impact on the rate which the business is charged by the lender on a monthly basis. It is a good idea to ensure that your business is not put at risk with a business mortgage and doesn't end up with any unnecessary costs which could make day to day operations harder.
We may advise you on the business mortgage arrangements and the ways in which the lenders may adjust the mortgage rates and costs depending on the success of the business. If this is something that concerns you and you would like professional advice on the way a business mortgage may work then please do not hesitate to request a FREE call back from our team. Simply fill out the call back request form on the right hand side of this page and we will contact you to discuss your requirements.
Business Mortgage - Suitable Commercial Property
Generally the business mortgage needs to be secured against a suitable commercial property. This would be located in a business park, or commercial shopping area where other businesses may be located.
Business Mortgage - Who are the best lenders?
The best business mortgage lender depends on your business type and the business mortgage size required. There are so many factors to take into account when working with business mortgages there is no fixed answer to this question. A business mortgage will vary greatly for small businesses to large businesses and the best one can also vary based upon the current state of the market. The best way to find an answer to this solution is for us to evaluate this for you and provide you with some quality feedback and guidance. Simply complete the call back request form and we can give you a call to discuss things further.
Business Mortgage - Why is a Business Mortgage more complex than a residential Mortgage?
A business mortgage is often more complex to calculate because the credit worthyness of the individuals is not the only thing which is taken into account, the lender will also need to find out what the credit worthyness of the business is like before it will provide it with a business mortgage. This might also be the case when the lender is looking to secure the mortgage over a period of time it might check the profitability of the business over that time period. This is to ensure that the business is not likely to become insolvent without the ability to pay back the mortgage the lender has provided. If the lender can see a decline in the businesses' success then it will be aware at an earlier stage that a problem may be arising.
A business mortgage might also be more complex to calculate because the business by law is considered to be it's own legal entity, therefore if it is a limited company the company would be responsible for the mortgage rather than the individuals who own the business. This type of legal setup means that the owners may be less concerned about paying this type of mortgage rather than their own personal one because it doesn't affect their personal life so closely.
Because of this type of setup a business mortgage might require a personal guarantee from individuals who run the business so the lender has less risk of the business did fall into administration and would be able to persue the individuals rather than the business for any outstanding balance.
Due to the complexity of these mortgages it is advisable that you speak to a financial adviser and get a real understanding of where you stand as a business owner and as an individual when taking out a business mortgage. Simply fill out the form for a FREE call back from one of our regulated and experienced advisers.
Business Mortgage Terms
Business mortgages generally run from 20 to 30 years and may be subject to balloon payments in certain periods throughout the lending period. Quite often however a business will re-mortgage within that period to find a better rate as the market changes or to increase the size of the mortgage due to business growth. This allows the business to keep costs to a minimum and to ensure that they are getting the best deal at any time. It is advisavle to speak to us about the mortgage requirements you have for your business to ensure that you are getting the best product for your needs.
Types of Business Mortgage Applications
There are a few different reasons why the business may need to apply for a mortgage. These may be:
- A business mortgage for a new property
- A business mortgage for an extension of an existing property
- A business investment in residential or commercial property
Any of these types of applications are valid reasons to request a business mortgage from a lender. For a new property a businsess mortgage may be required to assist the business in affording a property for the business to run from.
A business mortgage for an existing property may be required to assist the business in affording to expand the property through development work and may be accessible because the work once completed will increase the value of the business property therefore the lender is prepared to allow the business to borrow more.
The business may be looking to buy commercial property or residential property as a business interest. They may be looking to let the properties as a way of making a capital gain from rental or as an investment within an increasing property market.
Business mortgage deposit amounts
So how much deposit is required for a business mortgage? This is all dependant on each lender and what they are offerring at the time. It may be that this varies on a daily basis so the best way to check this would be to contact us via the call back request form to find out more information.
Generally speaking the norm would be for a lender to request anything from a 5% deposit to a 30% deposit, again this all depends on the lender and the status of the borrow, their reliability and credit rating may be taken into account when evaluating the deposit amount required.
Business Mortgage Interest Rates
Business mortgages interest rates may be higher than that of residential mortgages however as we always advise it is a good idea to check as this is not always the case. How can you find out? Speak to one of our advisers today and we can advise you of the best interest rates on a business mortgage. This will help you in knowing what you might need to repay on a monthly basis. We will also be able to advise about the business mortgage which may be suited more to your business.