What Is A Commercial Mortgage For?

Commercial mortgages differ from residential mortgages in that they are used to buy properties that can be used for business purpose, such as shops, warehouse, hotels and so on.

This is normally done in order to use the property for your business, but you can also raise money on the property and use that money for whatever your business needs, perhaps stock expansion, buying more equipment, or setting up an new operation in a different region or market. The principal remains the same, in that the money will be lent on the security of the building, that to say that if you have problems re-paying the mortgage, they will repossess the building to make good their losses.

There are specialist commercial mortgages for buy-to-let, where the property is rented out to either residential or commercial tenants, and development finance, where you can use the money to develop a property and sell it on at a profit.