Arguably one of the best investments a growing business can make is in commercial property. Whether it is purchasing an existing building, investing in new or simply adding an extension, having the ability to own a substantial business asset in the form of property guarantees the long-term future of the business.
Clearly the outright purchase of a new commercial property is often not possible due to the costs involved. This is where commercial property finance is so important. There are two options available, either a fixed rate or a variable rate. Fixed rate is an agreement over a set period where the monthly fee always remain the same, a variable rate will again be over a set period, but monthly payments will vary depending on what is happening with the Bank of England base rate.
With commercial property finance there will be a requirement for a deposit to be paid which is often between 25 to 40% of the total funding required. Often the amount of deposit required will depend on different scenarios which include credit history, loan to value ratio, risk level, feasibility of business plan and business performance.
Some of the key benefits of a commercial mortgage include all interest payments are tax deductible, as the property value increases over time so does your capital investment and either part or all of the commercial building can be rented to generate additional income.
Here at NGI Finance, we have been delighted to work with many businesses in helping them to secure commercial property finance. Recently we have helped with the refinancing of several retail shops, assisted a business to secure a second property by arranging a 30% deposit secured on their existing property and helped a firm of undertakers to purchase another location to assist with their ongoing expansion.
Of course, there are also some excellent finance options available for the refinancing of existing commercial mortgages. We recommend evaluating existing deals every 2 to 3 years to ensure you always have the most competitive deal available.
If you have any questions or would like to find out more about any aspect of commercial property finance, please call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.
Leave a Reply