If you need a commercial property it’s important to weigh up the pros and cons of both renting and buying. It’s not quite as simple as buying or renting a house and there are other business concerns to consider.

What classes as a commercial property?

If you are trading within the building or using the property for any kind of business purpose, then it is a commercial property. Even if you live within the building (for example you buy aretail premises or pub with an owner’s flat above) it is still classed as a commercial property. Here are some of the most popular types of commercial property:

• Office
• Warehouse or factory
• Shops or retail units
• Pubs, bars and restaurants
• Hotels and B&Bs
• Farm buildings
• Nursing homes and private clinics

Buying VS Renting

If your business is expanding or you’re looking for your first office, you need to decide whether to buy or rent a property. Most small businesses start off renting a space until they establish their turnover and know what they can afford when applying for a commercial mortgage. Here are some advantages and disadvantages of renting:

Renting pros

• Minimum deposit required compared to a large cash sum
• Easier to relocate or upscale/downscale as needed
• No maintenance costs

Renting cons

• Your landlord could increase the rent, affecting cashflow
• You might not be able to adapt the property if needed
• You will never own the property as a business asset

Some businesses rent a premises as a stepping stone before buying a commercial property, while others simply prefer to rent long term. Many businesses only require a small office or studio, for example, which is easier to rent. However if you’re thinking of buying here are the pros and cons:

Buying pros

• You know your monthly payments – not dictated by landlord
• You own the building so can make whatever changes you like
• The property could increase in value

Buying cons

• You’ll need a large deposit
• You’ll be responsible for maintenance costs
• More difficult to relocate

If you’d like to find out more about commercial mortgages, get in touch with our commercial mortgage brokers.

The post Do I Need a Commercial Mortgage? appeared first on Genie Lending: Business Loan Alternative Finance Specialists.

If you’re wondering whether to ask lenders about taking out a commercial mortgage, read on to see the top five ways it could help your business.

1. Avoid rent increases

When you decide to start a business, you need to decide if you’ll start off renting a space or whether you should buy and own it. While it’s a big commitment to take out a mortgage and buy the business premises, bear in mind that the rent on city offices and shops is forever increasing. If you get the right type of low interest mortgage then you can avoid rent hikes and possibly save money in the long run. Many business owners start out renting and then look to buy a property once they are making a good profit.

2. Refinance commercial property

This is another way of saving money for your business. Owning commercial property isn’t much different from owning your residential home – you’ll pay monthly payments on the mortgage, plus interest. Different lenders offer different deals, and sometimes you could save by switching to another mortgage provider and refinancing the premises. Bagging a lower interest rate could reduce your monthly payments and free up cash to spend on other areas.

3. Redevelop or renovate

Commercial mortgages are mainly used to buy business property, but the funds can also be used to redevelop a property. Should you wish to expand your premises or undergo a refurbishment, you’ll need a lot of money upfront. A commercial mortgage can cover these costs and the extra custom you’ll get from the expansion could cover the monthly repayments.

4. Capital gain

As with any type of property investment, look after it and you should benefit from capital gain over time. If the property increases in value from the time you bought it, this is another business asset. If there was ever a point when you wanted to sell your business or downsize, you could sell the property and earn extra cash.

5. Pay less tax

The interest payments on commercial mortgages are actually tax deductible. This means that business owners may be able to reduce the amount of tax they pay each year with a commercial mortgage.

Interested in finding out more about commercial mortgages? Get in touch with our business finance experts.

The post 5 Ways a Commercial Mortgage Could Help your Business appeared first on Genie Lending: Business Loan Alternative Finance Specialists.