Senin, 09 Maret 2009

What Is Business Mortgage

For entrepreneurs who want to get away from renting properties for their businesses, a business mortgage can be helpful. If you can’t afford the conditions in commercial development finance or not capable for 100% development finance, the business mortgage is the right option for you.

The 100% development finance may be provided from development finance UK to acquire property. But if you can’t afford the amount and the terms used, you can still acquire property through business mortgage — only that it entails mortgage arrangements. Another difference of commercial development finance and commercial mortgage is that while commercial development finance, with 100% development finance arrangement, requires the part ownership of the lender with the sale or rental profit from the output of the development project, business mortgages is solely for the business owner, except that he is paying mortgages to the lender.

There are several ways that the business mortgages can be utilized throughout the business world. But before you can get it from development finance UK and utilize it effectively, you need to know the basics of the business mortgages. First and foremost there is an obligation attached to business mortgage. Understanding the in’s and out’s of business mortgages will allow you to facilitate the biggest return from the equity that business mortgages release.

When looking into business mortgages, you would invariably find that there are two distinct types. One is the ‘Owner Occupier Business Mortgages’. This is where the borrower is looking to buy property and/or land for their business operations. The second is the Commercial Investment. This refers to the borrower purchasing property/land as an asset that can be rented out.

By using business mortgages from development finance UK, you can have a superior cash flow since it provides access to capital that you would not normally have with minimal up front payments and the flexibility to formulate a repayment plan that best suits your needs. Also, business mortgages let’s you retain ownership in the property. This means that that instead of raising funds by selling a share in the property to an investor, you retain complete ownership and all the benefits that goes with it such as having an asset that can increase in value. Business mortgages also have tax advantages. The interest on payments is tax deductible and made with pre-tax money.

Author: Cherry Bonachita

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