Commercial loans can be either Interest Only Loans or Principal & Interest Loans, which are secured by way of a first or second mortgage over income – producing financing commercial property, or even industrial or retail properties.
Why is finance usually taken out? To assist in purchase or refinance of a property, for the purchase of other business assets or to also provide funds for working capital reasons. If you are interested in viewing commercial property for sale, perhaps you may need to consider a commercial loan. This includes commercial property for rent, since you may need a loan to make further developments and so forth.
With regard to interest only loans – they are termed by 5 years and the rate would either be interest only variable or interest only as a fixed rate.
The actual interest payments would be tax deductible.
Financing commercial property through loans is not quite the same as the residential market. Commercial finance is classified as a very specialised field; people should therefore be wary of brokers promoting themselves as Commercial Brokers.
There are different loans available:
• Working Capital Loans
• Debtor of Factoring Loans
• Commercial Equipment Finance Loans
• New Construction Loan
• Fixed Rate
• Variable Rate
There are a number of reasons why financing commercial property via commercial loans can be beneficial to raising money you need. For any property project, cash flow is a first. Financing loan repayments are agreed and set for the term of the loan your cash is managed, which can be predicted monthly. Financing commercial property cannot be easier, as secondly, you will have large flexibility on how you use your financing gained, including paying off other higher interest loans. There are more positives to taking on commercial loans for completing any commercial property projects undertaken. A further advantage is that if you have backed your loan by using capital equipment then you will remain the legal owner of the equipment.