can you get a mortgage for commercial property

Can you get a mortgage for a commercial property?

A commercial mortgage can be used to get a commercial property! What is the criteria to qualify? Why should you choose a commercial mortgage for your commercial property? Read on to find out!

A commercial mortgage, in essence, is quite similar to a normal residential mortgage. The only difference between the two lies in the collateral used. While a normal residential mortgage would use a residential property as a collateral, a commercial property is used as a collateral for commercial mortgage.

Commercial properties have returns. These are usually represented by a business and not an individual. The business representing the property is the borrower of the commercial mortgage and will be liable to pay against the same. The income and financial status of the business would play a major role in the approval process for a commercial property.

What does it take to qualify for a commercial property?

Lenders are not as concerned about the individual and their income, they will look into the company and whether the company is eligible to be able to pay off the loan within the stipulated time. The business acts as the borrower and hence the business will be scrutinized!

The lenders look into these areas generally to determine whether a business is eligible to get a commercial mortgage for a commercial property:

  • Creditworthiness of the business
  • Amount of down payment you can put forth
  • The growth chart of the business and it’s status in the current market
  • Your credit rating

Want to know if you qualify for a commercial mortgage? Get your commercial property valued by Platinum Mortgages Ottawa!

The business has to be on a rise or on its way to receive a big push if you want a commercial mortgage lender to approve your loan for the commercial property. How the business has been running and what are the future projections you expect out of it will play a major role in deciding whether the lender will forward the sum to you.

Your income, though it may not play such a significant role, will also be in the lime light. Your credit ratings, your credit history and other business plans and performances in enhancement will be looked into before you get an approval for a commercial mortgage.

Why choose a commercial mortgage?

A commercial mortgage can be the reason you have turned your commercial property into a money making machine. Whether it is for renovations, business expansion or investment purposes, a commercial mortgage can make the difference you needed for your business to reach new heights.

A mortgage for a commercial property can be obtained with the help of a mortgage broker. Lenders will require a good presentation on what you intend to do with the money you receive and how you will use it. A mortgage broker can help you smoothen it out and ensure that you get the best mortgage for your commercial property at the best rates!

Contact Platinum Mortgages Ottawa for the most competitive mortgage interest rates for your commercial property!

What The Businessmen In Ottawa Should Importantly Know About Commercial mortgages?

Commercial loans are the loans sanctioned for business purpose and not to any individual for personal needs. By business purpose, it means that commercial loan can be taken for the purposes of expansion of your current operations, or the purchase of new plant and equipment in order to align growth. Commercial loans can be availed by a variety of entities belonging to varied categories. Also, a few entities in Ottawa opt for commercial lending to fund their operational expenses. Commercial lending may also be sanctioned for smaller purposes such as payroll payment requirements, or ancillary costs for the flexible running of production.

The below mentioned are few of the commercial lending types in Ottawa

-Construction Loans

-Commercial Mortgages

-Land development and servicing loans

-Canada Small Business Financing Loans

How Commercial Loan Process Works

As in any other loan in Ottawa, creditworthiness is an important aspect in the process of sanctioning of the commercial loan, in determining the amount of loan and the security required. You will be required to present your historical financial documents such as Balance Sheet, Profit and Loss Statement, to the bank or the lending financial institution. The financial documents are assessed and are considered good if they reflect positive and consistent cash flows. This assures the lender that, apart from the Profit the business generates, it has enough cash to pay back the loan in requisite time on the terms of the loan contract. The commercial lending in Ottawa is sanctioned at the prime lending rates and only in specific cases, the rates differ.

If you are opting for a commercial lending for equipment or a depreciable asset which also poses the risk of breakdown due to reasons like natural calamities, short circuit, and other, then the banks require you to insure the asset in full, from the loan fund which is sanctioned to you. In the course of the loan, you are required to submit your monthly or quarterly financial statements to the bank till the repayment of the loan.

As commercial loans act as an aid to the businesses for reasons like working capital requirements, or short term loans for the seasonal demand push in Ottawa and such, the commercial lending also have the provision of renewal at the time of sanction. In a renewable commercial loan, the loan is automatically ‘renewed’ for an additional period as the original loan repayment is made. A capital intensive business in Ottawa most often seek for renewable commercial loans.