One advantage of a commercial mortgage is that you will continue to own your business and your premises. To raise the sort of money available through commercial mortgages by any other means would result in a percentage of your business being owned by another party. Out side investors always require a percentage of your business before they are willing to hand over any money, sometimes they can ask for a significant percentage to be in their name. A commercial mortgage lender is only entitled to interest on its mortgage and nothing else.
Another major benefit of owning and keeping your premises is the potential for an increase in its value. Owning property or land is one of the best ways of gaining financial returns over a long period of time. Although prices have been falling of late prior to that values were increasing over 10% each year and after the current down turn they are likely to rise in similar fashion again.
Commercial mortgage repayments are often similar amounts to that of renting. Mortgages payments often stay at similar repayments each month, as long as interest rates do not rise, where as rent prices tend to go up year on year. Security and opportunities owning your own business premises also outweigh those of renting. In the future you will be able to remortgage your property if extra money is needed for the company or you can even sell your property with the chance of making big prophets if property prices are higher than when you purchased.
Commercial mortgages often have lower interest rates than most other unsecured types of loan or overdraft. This is a very attractive proposition for most business as it means lower monthly repayments. If you have a fixed interest rate mortgage then you will know exactly how much you will be paying each month, making it far easier to budget.
Commercial mortgage interest payments are tax deductible while the net proceeds of your loan are not part of your taxable income. This can contribute to reducing the tax burden for your business each year.
