What is commercial property funding?

09/10/2014
What is commercial property funding?

Commercial property funding is a wide reaching term, but it is a property finance offering that provides businesses, both big and small, with a massively useful mechanism for raising finance and growing their organisations. Well, worth the 5 minutes it will take you to read this article to discover.

Commercial property funding allows businesses to borrow money to purchase or improve a currently owned commercial building. However, it also can be used to define the service many lending institutions offer that uses property as collateral against which to borrow money for any business purpose.

Commercial property funding plays a vital role in the UK business sector, as it helps companies to purchase their own property assets, which may appreciate in value over time. These commercial properties can also be used to leverage the best rates for borrowing against providing companies with a major cash injection in order to fund future expansion plans.

In order to get the most out of your commercial property, it is important to understand all the financial options that you have. Here, we explain a little more about the top three ways to obtain commercial property funding.

Bridging Loans
A short-term finance option, bridging loans are secured on land, residential and commercial properties and can give businesses a short-term cash injection so that they can purchase the property that they want. Bridging loans provide an ideal solution for companies that find they are unable to release the equity that is currently tied up in an investment or asset. While bridging loans generally have higher rates and charges than normal mortgages, because of their short-term nature these will not bite for long.

Commercial Mortgages
For companies that are looking for funding to buy a property, commercial mortgages are the perfect financial package. Commercial properties are a sound investment for businesses or every size, and of course it is also possible to refinance a property in order to get another cash injection further down the line. With all interest payments tax deductible on commercial mortgages, they are a great future investment, especially as you’ll no longer have to pay rent.

Commercial development finance
If your company is in the business of building, developing or renovating properties, then commercial development finance is an excellent way to fund your projects. With the option to refinance your new development in the future, it is wise to develop a long-term relationship with your finance provider and research the field, which includes High Street development loans, top-up money and specialist lenders.

To find out more about commercial property funding, take a look through our site, or call us on +44 (0) 7721 565802.

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