Any business owner knows how hard it can be to get that first commercial mortgage – especially if they were a start-up business with virtually no financial history. Fortunately a commercial second mortgage is much easier to get, but be warned – it comes with a lot more risk and a lot more responsibility. Since the recent financial meltdown, lenders are much stricter and with new legislation the entire lending market is being overhauled. Getting any loan is not that easy and if you are in the market for a commercial second mortgage you might be in luck.
When you look at lending from the financial institution’s point of view, then their major concern is the risk that the mortgage won’t be repaid. If you are a start-up business the risk is super high for them. They usually look at the business owner’s individual financial history to try and determine their potential risk. If you are an established business with an financial history then things get a lot easier. When you apply for a commercial second mortgage your current and recent financial record will serve as the measure of your financial capability.
A commercial second mortgage is an important investment vehicle for any growing business but you need to take great care with what you get yourself into. These mortgages typically have a much higher repayment rate and they must be repaid over a much shorter term. Unless it makes sound business sense it is an expensive option and one that you need to approach as a high interest loan.
There are many financial institutions that would happily give a commercial second mortgage to a good company. If you have sound financial records and a proven track record banks will practically beg you to take the second loan because for them it mans good earnings from the high repayments. For you however, it means quick capital and if your business it growing rapidly this is most certainly a good option to look at. You can usually get a free assessment done by any bank or lending institution and they will determine how much you can get.
