A commercial mortgage is a loan secured on a business property, normally to purchase it, but not exclusively so.

You might be presently occupying a property under a lease and have the opportunity to purchase the freehold, or you could have identified a new property, possibly with development potential. In either scenario a commercial mortgage could be the right funding vehicle.

Commercial mortgages can also be used as secondary security, for example, for a merger or acquisition.

Terms for commercial mortgages can be long, possibly up to 30 years, but are most often between 5-10 years. Interest rates are normally competitive because of the quality of the security the property represents.

Things to look out for when considering a commercial mortgage are:

• any restrictions on how the property can be used, now or in the future
• the level of deposit or contribution that is needed, which can be as high as 50%
• the repayment levels and the extent to which they are fixed  – remember, in the worse case scenario, you could lose your business premises if you default.

The services of a knowledgeable business finance broker can be particularly useful with a commercial mortgage, so talk to us about the criteria, costs and service offered by the range of lenders that we deal with.