The process of buying commercial property is not that much different from residential. There are many advantages to buy commercial property as opposed to renting. Business mortgages are often the most appropriate method to buy a property for business use. Business mortgages allow businesses to raise funds without selling any parts of the company through shares or to investors. Business mortgages allow businesses to free capital and cash flow for other purposes. Interest payments for business mortgages are deductable for business purposes. Monthly payments for business mortgages are often lower that rental charges and can be fixed for a number of years. However, commercial mortgage lenders consider each application on an individual basis, taking into account the company’s financial position and circumstances, and assess individuals running the business. Therefore, every commercial mortgage will be different as rates charged and terms offered are tailor made. The interest rate charged normally will depend on the nature of the business, the type of building and will reflect the perceived risk. Commercial mortgages are usually offered for 15 or 20 years term, depending on the age of the building and the nature of the business. When applying for a business mortgage, expect to put down a deposit of between 20% and 30% of the property value. However if the business is successful and can show ability to service business loan, they can borrow more, but they may have to pay a higher interest rate.

Of course, as with any property buying process, the surveyor will have to value the property for lending purposes, but in the case of commercial property, surveyors normally will be able to advise on a suitability of the property for the proposed business, check business rates, establish the value of the property for insurance purposes and advise on altering the building if required. As with any valuation, lenders will want to know the value of the property, whether property is freehold or leasehold, type of construction, age and condition of the building. For commercial mortgages, they will also want to know additional information, like location of the premises, planning permission, restrictions on use, covenants and if additional securities are available, for example personal guaranties. Lenders will also need to know what the purpose of commercial finance is. Businesses may have different reasons to buy a property; they may need a property for the business itself, investment or development. Business loans are available on secured and unsecured basis. Business loans available on an unsecured basis, but they are normally more expensive than business mortgages. Business loans are normally considered as short-term finance as normal term for business loan is between one and ten years. Amount of business loan will vary from lender to lender and will reflect lenders risk. When assessing application for business loan UK lenders normally will want to know purpose of business loan, business plan, evidence of business ability to service this business loan and what own input business puts towards this purchase. When underwriting business loan UK lenders check annual accounts, cash flow forecasts and quite often will seek personal guaranties from key persons. As unsecured business loans are not secured on business assets, rates charged are quite high and often comparable with interest rates charged by credit cards. Some sole traders or small business owners sometimes may choose to take personal secured loans rather than business loans, but it is advisable to seek professional advice. There are business loans, which are available on secured basis and therefore their rates are lower than for an unsecured business loans. Business loans can be secured as a fixed charge on a specific asset, like property or equipment or as a floating charge where assets secured are not specified. If business activity is building construction, then development finance probably will be most suited for this type of activity, as this type of business loan is especially designed for building projects. Development finance is usually more expensive as lenders tend to charge higher fees, borrowers may find that there is acceptance and exit fees and that they have to pay surveyor fees several times, as funds are normally released in stages and lenders require several inspections. Development finance can be used by property developers, small builders or for self build projects.

Directors of the business have to consider the development loan carefully as development finance can put their family assets at risk. When a development project undertaken with the intention to let rather than to sell, developer must arrange an appropriate commercial finance and take into account that if any units are not let or rental income is not sufficient enough to cover business mortgage payments they have enough funds not to default. Commercial development is considered to be more stable that residential, however lenders and developers considering development loans have to take into account the state of the economy as at times of recession many businesses put development plans on hold , while straggle to let out commercial units. Commercial mortgages can be used for different purposes, as part of a corporate acquisition, for a management buyout or to finance buy to let. Buy to let UK is accepted as a proven method of achieving a healthy return on your investment. However, buy to let is a business and as any business require careful planning. Buy to let mortgages UK once expensive and unpopular have become an invaluable tool for many investors. Buy to let mortgages take into account rental income as well as borrowers own financial situation. Monthly rental income should cover buy to let mortgage payments by 125-130%.When offering buy to let mortgage UK lenders require landlords to purchase buy to let insurance to cover building only. Buy to let insurance is different from standard house insurance as it has a built in liability cover, which normally is not required for your own property. It is now possible to have buy to let insurance which will cover a loss of rental income. Buy to let insurance is designed t to protect lenders interest and your investment. When buying buy to let insurance, you need to be sure that cover will be sufficient enough to cover rebuild costs in the event of fire. Buy to let mortgages are available on fixed and variable rates and there are buy to let mortgages with flexible features like overpayments. You may consider buy to let mortgages from residential lenders, if you are buying a residential property, but if you are looking for a large HMO property, few flats in the same development or commercial premises you may find it difficult to source standard buy to let mortgages, then you will need commercial finance. You may be an experienced buy to let investor looking to expand your buy to let UK portfolio or purchasing your first commercial property, commercial finance lenders will want see your ability to service buy to let mortgage. Buy to let mortgages UK have been designed to be self sufficient as rental income should be covering mortgage payments, but beware that mortgage payments will be due whether property is occupied or not. When offering buy to let mortgage UK lenders require landlords to comply with current rules and regulations. If you are looking for a buy to let remortgage, you will find that there are not many products offering high loan to value. However, you will find buy to let remortgage with free initiatives, like valuation. When underwriting buy to let mortgage, lenders will make sure that rental income is sufficient enough to meet their lending criteria and will rely on surveyor s report to establish that. Also when considering buy to let remortgage pay attention to lenders fees, which can be quite high and early repayment charges. Commercial mortgages are now offered on quite competitive rates and depending on the purpose, business mortgage can be a very useful tool. Whether you are looking for business loan UK, development finance, short term bridging finance or a buy to let mortgage UK, you need to consider: what term will suit your business needs, whether fixed or variable rate will be suitable and what will be acceptable interest rate. We will help you to check all available buy to let UK products, buy to let mortgage UK and buy to let remortgage rates, check best business loan UK rates and find the most appropriate business mortgage for your business needs. There are now many companies and websites specialising in commercial and buy to let mortgages and even if you mistype like buy to let morgage or buy to let morgages, buy to let mortage or buy to let mortages, or even commercial morgage, you still will see hundreds of results in any search engine.