Commercial Mortgage
How a mortgage company can help you
By Nicholos Poma
There are instances where a small business may need to purchase a building. Unfortunately, this can be a long, arduous ordeal filled with many pitfalls. So how can a small business owner find assistance in this difficult and tedious process? It’s the mortgage lending companies who have come to the rescue of many entrepreneurs just starting to get their business off the ground.
Real Estate Financing
With the current mortgage crisis, some mortgage companies are imposing stricter guidelines on their loans. This may serve as an inhibitor to the small business owner when first seeking to acquire property. Some mortgage lending companies may require that you have been in business for a minimum of five years. In some cases, they may require that you commit to financial reporting on a regular basis to ensure that your business is performing well enough to pay back the loan.
A down payment can vary depending on the mortgage company, but in general, you can expect to put down about 10 percent of the total cost. It is possible that the company may require you to have a relationship with a bank. (However, this is not a common requirement.) Nevertheless, with all of these requirements, small business can benefit from the use of these mortgage lenders.
The Fine Print
One of the benefits in using a mortgage company is that you are assured to receive a competitive interest rate. This can translate into thousands of dollars in savings over the life of the loan. The mortgage lender can also tailor the loan repayment schedule to meet your business needs. These loan repayment schedules may even be based upon your company’s performance and assets.
Customer Service
Once you have established a loan with a mortgage company, you may even receive further assistance in future loans on your property if you should need to renovate, purchase equipment or expand your business. This relationship with a mortgage lender also translates well when your company needs to establish a line of credit with a supplier, or service your business may require.
Mortgage lending companies take care of most of the paperwork and legal issues which are to be considered when purchasing property. At times, they may even send an appraiser or building inspector to ensure that the building is priced at fair market value and is free from structural discrepancies which may lead to costly repairs in the future. This serves as an added layer of protection for you, the small business owner.
Mortgage lending companies provide a far more valuable resource to the small business owner than just helping to alleviate the large initial cost of purchasing business property. They also serve to eliminate a large part of the burden in the property acquisition process.
