Are Your Commercial Mortgage Repayments Becoming Difficult To Maintain?
Unfortunately, there are a number of businesses that, for a variety of reasons, find themselves in a difficult financial situation having perhaps traded successfully and profitably for many years prior to going through a troubled period. For instance, it could be that the business has lost a contract with a major client that makes up a significant percentage of turnover resulting in a drop in income affecting cash flow and making it difficult to maintain the repayments on a commercial mortgage that was taken out many years ago when the business was going through better times.
If this is the case then one of the things that a business owner may wish to consider doing is getting in touch with the lender and make them aware of the situation. If it is considered that it is still viable for the business to continue trading then the bank or building society may be able to offer some form of assistance. For instance, the bank may be able to restructure the terms of the commercial mortgage such as to extend the term thus reducing the monthly commercial mortgage repayments to a level that is more comfortably affordable.
In doing so, it may stop the borrower from falling into arrears on the commercial mortgage and defaulting on the borrowing and thus avoiding, for instance, the business getting a poor credit rating with the credit reference agencies, going out of business and the bank having to realize any security that it holds to cover its lending.
Do bear in mind that, as a result of extending the original term on the commercial mortgage, it is quite likely that the business will end up paying back more interest than it had originally been expecting to. Some may argue that this is a price worth paying if it enables the business to continue trading and returning to being a successful business once again.