As your business expands and becomes more profitable, you may find yourself on the hunt for a commercial property. Acquiring a commercial mortgage can give you more leeway as a business owner to find a building or complex best suiting your trade.
Understanding commercial mortgages
A commercial mortgage, also known as a business mortgage, is a loan used to purchase property for the operation of a business.
A business property is often used to store inventory, as office space for retail operations and more. You can also use a commercial mortgage to refinance a commercial property you already own to make loan terms more agreeable.
Residential loans versus commercial real estate loans
A commercial loan is usually awarded to corporations, trusts and developers and terms usually fall between 5 and 20 years.
Residential mortgages are awarded to individual borrowers, often who are seeking residential properties (such as a house to live in), with a 30-year term being the most popular option.
How do I qualify for a commercial mortgage?
To qualify for a commercial mortgage loan, the property being purchased or refinances should be occupied by no less than 51 percent of your business venture. After this is disclosed, lenders consider the location, profit, credit history and other financial factors to determine if giving you a loan is a good investment.
A residential mortgage is often associated with higher interest rates and fees, so it pays to shop around as a business owner. Working with a commercial mortgage lender, you can hunt down the best loan plans offering interest rates and terms to your liking.
About the Author
Tony Blevins
Hi, I'm Anthony Blevins and I'd love to assist you. Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. I'd be honored to put my real estate experience to work for you. I have been a licensed realtor since 2015 and have lived in South Florida for over 30 years. My background is a business professional with over 14 years of experience as a wealth portfolio manager for high net worth clients in both the Naples and Palm Beach Island area. One of my first jobs while I worked my way thru college was in the construction industry, building, remodeling and restoring homes as I earned my Bachelors degree in Finance. I like to spend my free time offshore fishing, boating, scuba diving in the keys and enjoying all the benefits the South Florida weather has to offer.