Give Your SME A Deserved Boost By Taking Advantage Of A Commercial Mortgage
Give Your SME A Deserved Boost By Taking Advantage Of A Commercial Mortgage
In need of a commercial mortgage? Looking to gain from the capital growth of your business premises but don't own it. Then taking out a commercial mortgage and buying the place you work in could really benefit you and your business! Owning your premises can also help with cash flow giving you the ability to fix payments such as mortgage and utilities.A commercial mortgage is simply a mortgage on business premises and there are plenty of reasons why it can be a good idea. For a start it's an investment to own the property as it appreciates in value over time. You can also secure other debts against the property and raise funds for further investments and expansion.Share the risk by investing some of your own hard earned: Your bank will not want to burden all of the risk. In most cases banks will want to see risk shared and that you are burdening some of it personally. This way they know you are committed financially to make the business succeed and if it were to fail you would feel financial pain as well as your fellow investors. So be prepared to commit personal and business capital if you want the bank to agree to a commercial mortgage.A deposit on commercial property is usually much more than on personal property - usually 25-50%. So you will need some good funds built up before you think about buying business premises. Have a great business plan: Commercial lenders are highly unlikely to lend to you unless you have a solid and robust business plan. Any lender you approach will want to study your business plan to find out how your business has performed in the past and how you expect it to perform in the future. Make sure your business plan is comprehensive and accurate and make sure you can explain all your figures and plans to a lender.They will be looking for realism based on past experience. How your business has performed to date and how the market is predicted to perform in the future. Be prepared to justify and back up all predictions, sticking a finger in the air and guessing is not really a recognised method of forecasting business success.Demonstrate that you can handle debt: Commercial lenders will want to be assured that you understand the responsibility you have when taking on debt and that you will keep up the repayments. Demonstrating that you have done this in the past with other debts is a good way of proving that you can manage your responsibilities when it comes to debt.Show any potential lender proof that you have always made your payments to loans or other commercial borrowing. Demonstrate that your rent has always been paid on time and that your company credit card payments are in order. If you can prove that you have a track record of managing debt responsibly, a commercial lender is much more likely to agree your borrowing.Have Business Information To Hand: Your lender is likely to ask for a lot of information about your business before they will lend to you. They can ask anything from information about the Directors to your profit and loss details, as well as any other credit that you business has. Most of this should be detailed in the business plan anyway, but you should know all of the information.Make sure that you keep a file to hand with all important information on your company, as if you're not able to answer questions easily this may hinder your chances of obtaining a commercial mortgage, which can cause your business to suffer if you're not able to get onto the commercial property ladder.