There are advantages to commercial mortgages that can benefit any business. However as with any choice there are dis-advantages!

The beneficial advantages of a commercial mortgage are:-

• Purchasing a commercial property via a mortgage loan offers the potential for long term capital apreciation.
• Repayments on a commercial mortgage are likely to be similar to paying rent.
• Monthly rentals tend to move only one way, up!
• Mortgage interest payments can be off-set against pre tax profits.
• A commercial property with sufficient equity can be used to raise working capital for your business with a mortgage.
• Any surplus floor space can be sub-let with the agreement of the lender.

The negative commercial mortgage considerations are:-

• It should be noted that repayments on a variable rate mortgage will track interest rates up and down.
• The initial deposit for a commercial property purchase means that taking on a mortgage will reduce available working capital within your business.
• If you need to relocate your business then you may have to wait until you have sold your current commercial premises.
• Capital values can go up and down, however over the longer term the expectation would be that the value of a commercial property will increase.

When deciding whether to take on a commercial mortgage we would advise discussing the advantages and dis-advantages with a trusted professional, for example your accountant first!