As well as being a useful way of financing the purchase of business premises for a new business, commercial mortgages can also be an excellent way of funding the expansion of an existing business. A commercial mortgage can also be used to fund investment in land or property which will be used for commercial purposes.

Cost wise, a commercial mortgage is generally cheaper than a outright unsecured loan. This is because the mortgage is offered against some business assets, and only if the business logic and makes sense, and business plan supports it. This also means that the payment terms are also longer, generally 10 or more years. So the repayment amount is not that high, making a better option for a business' cash flow.

Can you remortgage an existing commercial mortgage?

Of course. If you already have a commercial mortgage on your company's business premises, you might find you could benefit from remortgaging.

A commercial remortgage allows you to unlock some of the equity that is currently tied up in your commercial property. It could also be a chance to switch to a more competitive, cheaper mortgage, especially if your or your company's credit rating and business history have improved since you took out your original commercial mortgage.

The money you free up through a commercial remortgage can be used for all sorts of things for your business. For example, you could purchase additional stock, or invest in new machinery or other fixed assets such as vehicles. Another use for the extra money can be to pay off outstanding bills, or clear other borrowings such as the company's overdraft.

Here are some typical uses for a commercial mortgage or remortgage:

- Borrowing money to buy a shop

- Raising finance to purchase an office building

- Buying a pub

- Financing the purchase of a restaurant

- Buying a hotel

- Buying a house to convert to a Bed & Breakfast (B&B)

- Raising finance to buy an existing business

- Clearing a business overdraft

- Improving business cashflow

- Buying new plant or machinery

- Financing the purchase of company vans and other vehicles

- Borrowing money to buy extra stock for your business

- Funding the expansion or refurbishment of your offices

- Borrowing money to pay for training

- Buying land for business purposes

It is always best to shop around and secure the best deal for your business. With fierce competition among banks, it is always possible to secure the mortgage on favourable terms to YOUR business, and not to the bank.