| Commercial mortgage loans are executed using real | | | | commercial mortgage. It is similar to the fixed rate |
| estate to collateralize the loan. Commercial mortgages | | | | home mortgage loan in that the interest rate remains |
| are similar to residential mortgages, except that the | | | | constant throughout the term. However, the term for |
| collateral used to secure the loan is a commercial | | | | most commercial mortgage loans is between 3 and 10 |
| (business) building rather than a personal residential | | | | years but they can be extended for as long as 25 |
| home. If the borrower defaults on the loan, the lender | | | | years. |
| can seize the collateral (building) to recover the loan | | | | The commercial mortgage loan amount and interest |
| proceeds. | | | | rate that you can receive is a direct correlation of the |
| Commercial mortgage loans are not available to | | | | credit worthiness assessed by the lender with respect |
| persons, but rather to businesses, which include | | | | to your ability to repay the loan. If you have an |
| partnerships, incorporated businesses, limited | | | | excellent business record with a verifiable profit and |
| companies, etc. The business must be sound financially | | | | loss business statement then you will have little trouble |
| and the process to verify the business income can be | | | | getting a commercial mortgage at an attractive |
| more complicated than verifying the credit worthiness | | | | interest rate. |
| of a specific individual. That is why traditional | | | | Commercial loans are not provided without extensive |
| commercial mortgages can take six to nine months to | | | | scrutiny regarding your business stability and |
| underwrite. | | | | profitability. The Lender usually wants to see your last |
| Commercial loans are procured for a variety of | | | | three years of audited financial statements including a |
| reasons: to buy the premises of an existing business, | | | | Profit and Loss statement, balance sheet and a cash |
| to make improvements or enlarge existing premises, to | | | | flow forecast. Favorable business information is critical |
| make commercial and residential investments or to | | | | to the lender and to you because, as stated earlier, if |
| develop the existing property in other ways. An | | | | you default on the loan the lender can repossess your |
| example would be to buy already constructed | | | | property and sell it to repay the outstanding mortgage |
| business premises, like offices, shops, restaurants, or | | | | balance. |
| pubs. Additionally, they can also be used to buy | | | | The best place to find commercial mortgage loans is |
| business assets such as plant equipment and | | | | on the Internet. There are enormous numbers of |
| specialized machinery. | | | | commercial lenders vying for your business and they |
| The Interest rates for commercial mortgages are | | | | all advertise on the Internet. It is possible to compare |
| generally higher than those for residential mortgages | | | | many loan quotes side by side and determine which is |
| but lower than interest rates on unsecured business | | | | best for your financial situation. |
| loans. A fixed-rate loan is the most common | | | | |