As a business owner, you may consider leasing or acquiring a commercial property to manage your company. While leasing can be a convenient and quick possibility, many business owners favor having their own space. Similar to a personal mortgage loan used to buy residential homes, companies can use a commercial mortgage loan to purchase a business property like an office building or warehouse.
Like a residential mortgage loan, a commercial mortgage loan uses the mortgaged property as a loan collateral source. However, the commercial and residential loans differ in that commercial mortgages usually have a much shorter term. On average, a business must pay back their commercial mortgage in 5 to 20 years.
Benefits of Commercial Mortgages
When taking out a commercial mortgage loan, advantages like maintaining ownership of your business premises become available; unlike leasing a building for your business, which keeps you at risk of losing the space. Even though you will acquire a monthly mortgage payment responsibility, these will likely not cost you much more than a regular monthly rent. They often come with lower interest rates, fixed APR, and fixed monthly payments, which means you can prepare for future business expenses more precisely. It also means you have full control over any space alterations.
When you obtain a commercial property, you are also making significant capital gains. Getting a space for your business can be valuable for achieving capital growth over a long time, as prices can tend in the long-term. Another significant bonus to consider is the capability to produce additional revenue from your owned property by having the option to rent out a part of the building for a monthly rent price.
Learn More About Commercial Mortgages
If you have a business and need a place to build, relocate, or purchase a commercial property, a commercial mortgage may be your next step. For more information about commercial mortgage loans or help applying for a commercial mortgage, contact the business banking professionals at Mechanics Cooperative Bank, or apply for a commercial loan today.