17 May How To Get A Commercial Loan In Canada- Pros & Cons!

Are you planning to buy a commercial property? When business owners are willing to buy a property for commercial purposes, they take out commercial mortgages. There are many types of commercial loans or mortgages available to choose from, including buy-to-let mortgages, which are acquired with an intention to renting out a property and earning profits. Not only this, commercial mortgages are an ideal choice if you are planning to make property improvements or commercial renovations.

In this blog, we’ll discuss how to apply a commercial loan, its pros and cons.

How to obtain a commercial loan?

Since commercial loans are customized mortgage solutions that help businesses reach their objectives or buy property, they are a bit different than residential mortgages. Regardless of your business structure, i.e. sole proprietorship, limited company, LLP, trust, or partnership, banks, lenders, and many financial organizations readily provide you with easy commercial loans in Surrey.

Pros & Cons of Commercial Loans

Check out the benefits and drawbacks listed below that can help you make an informed choice, in case you are planning to apply a commercial mortgage but are unsure about it.

Pros

• Simple access to finance: These mortgages are an excellent way to obtain capital, regardless of whether you want to purchase a business property for investment or expansion.
• Greater financial stability: Owning a secure property can provide you with greater stability and long-term value growth, especially in the recent market trends of rising rental rates.
• Get tax advantages: You can save on taxes by getting approved for a commercial loan in Surrey as the interest payments and costs associated with the property are deductible.

• Flexible funding alternatives: Many lenders and commercial mortgage brokers make it simple to examine your options among the several commercial mortgage choices available.
• Helps build equity: Develop equity by increasing the value of your holdings and use it as equity leverage when applying for loans or making more investments.

Cons

• High interest rates: Compared to residential mortgages, commercial mortgage interest rates are higher.
• Strict eligibility requirements: Before approving a business for a commercial mortgage, lenders thoroughly assess the financial status of the business, and may ask for large down payments.
• Market volatility: The state of the economy, changes in the mortgage market, and risks specific to your business or industry can affect your chances of getting approved.
• Repayment penalty: In some case, lenders may impose penalties for early repayment of mortgage payments.

Is a commercial loan the best option for your company?

Interest rates on commercial mortgages are lower than those on other business loans. In case, you need to relocate or shut down your company, you can still handle the monthly instalments by selling or renting out your property. 

If you are planning to apply for commercial loans in Surrey, rely on none other than Satbir Bhullar, your trusted mortgage broker. We specialize in residential, commercial, and construction mortgages and help our clients secure an easy loan approval at a low interest rate.