More young people securing commercial mortgages

More young people securing commercial mortgages commercial mortgages

Recent surveys have revealed that the number of business start-ups founded by people under the age of 25, has grown by 15% (compared to other age groups at 6%) in 2007. Amongst the most popular start-up types for these young entrepreneurs were construction, high street service sector (such as hairdressers), leisure and restaurants.

This trend has been mirrored with similar increases of young entrepreneurs using commercial mortgages and secured business loans to fund the capital they need to start these businesses.

Why should young people take out a commercial mortgages instead of renting?
Taking a commercial or business mortgage allows you to own an asset (the business premises) which may appreciate in value. When the time comes to sell, you could have realised a capital gain.

What are the main advantages of a commercial mortgages

Retain your business - raise the business finance you need without have to relinquish a percentage of the ownership of your business (as you may have to do through other channels)

Capital Gain - Property rises in value. If you buy yours with the help of a business mortgage, you could financially benefit from this when you sell. Tax deductible - Commercial mortgage interest payments are tax deductible Stability - Mortgage payments are generally more desirable than rental payments as they are less prone to large, non-index linked rises. Better cash flow management - a business mortgage schedule is set out over a number of years allowing a business to better plan for the long term

Also, rental payments are generally regarded as more volatile and are more likely to experience drastic increases. Commercial Mortgages therefore offer greater stability and allow for more stable long-term business planning as long as interest rates do not rise too significantly

Michael Thommes, Managing Director of leading commercial mortgagesspecialist General Finance Centre, explains: “We are increasingly lending mortgages to younger people. We often find that many have accrued debts during their further education, have bad credit ratings, and therefore have been turned away by high street lenders. However, we at GFC are able to help these entrepreneurs despite their bad credit or other application rejections due to the flexibility of our commercial mortgage and business lending products.”

I write for and behalf of General Fianace Centre General Fianace Centre