As a business owner, you may be a sole trader, a partnership, or a limited company. And of course, you could be operating in any one of a myriad of industry sectors.
Hotels and guest houses, restaurants and fast food takeaways, pubs and wine bars, newsagents and supermarkets, scaffolding companies, hauliers, nursing and care homes, engineering and manufacturing businesses, software and IT companies, solicitors, dentists. I could go on, but you get the idea.
The point is, if you run your business from a freehold commercial property that you or the business owns, (depending on your business, amongst other things it could be a retail premises, office, industrial unit, warehouse, surgery, hotel, or a care home) then when it comes to raising finance, a commercial mortgage could be an option for you.
Essentially, a commercial mortgage is very similar to a residential mortgage. You take out a residential mortgage when you buy your home, and the lender uses your home as security for the mortgage, by taking a legal charge over the freehold.
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A commercial mortgage works in the same way. The commercial premises from which you operate your business is the security for the mortgage.
You can use a commercial mortgage for many reasons, including:
Whilst this is not an exhaustive list of reasons for raising a mortgage against your commercial premises, these are some of the common ones.
One other reason for raising finance against a commercial property that we come across on a regular basis is for what is called a ‘sitting tenant purchase’.
This is particularly common where the commercial premises involved are retail, an office premises or an industrial unit.
This scenario occurs when you run your business from a property that you rent or lease.
The landlord, to whom you have been paying rent, decides to sell the property and offers you the opportunity to buy the freehold. You would then raise a commercial mortgage to enable you to go ahead with the purchase.
If you would like to find out more about your options and how we can help you arrange a commercial mortgage for your business, book a call with one of our commercial mortgage brokers. For other business finance options, learn more about asset finance, invoice finance and unsecured business loans.