Commercial mortgages

Tuesday, 03 July 2007 04:40

A commercial mortgage is a loan taken out to help fund the purchase of land or buildings that will be used for business purposes.

Similar to a residential mortgage taken out for a property designed to be lived in, with a commercial mortgage the lender has a legal claim on the property until the loan is fully paid off.

Commercial mortgages are generally taken out over a repayment period of 15 years or longer and generally for amounts larger than £15,000.

Lenders will ask for information about your business' performance, accounts, profit-and-loss forecast and other documents before they will lend.

Deposits of between 20 and 30 per cent for the purchase are also typical, although this varies between lenders.

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