Commercial Finance For Debt Consolidation

A commercial mortgage can be taken out for a variety of purposes such as to purchase and/or renovate business premises or perhaps to buy an established business. Another purpose that some lenders may consider lending on a commercial mortgage for is to consolidate one or more existing debts.

The busin ess may wish to consider a commercial mortgage to clear other debts that it has.
A commercial mortgage may be arranged to consolidate other financial liabilities that the business has.

So, when and why would a business want to consider a commercial mortgage for debt consolidation?

There are a number of occasions when a commercial mortgage may be an option worth considering. For instance, the business may have an overdraft facility that is being used but where the business current account is no longer fluctuating into credit and has been permanently overdrawn for quite some time. If it is proving difficult to clear the borrowing on current account from normal cash flow then it may be possible to consolidate say the peak overdrawn balance onto a commercial mortgage and reduce the amount of the overdraft facility or cancel the facility completely. Another occasion could be where the business has say one or more other financial liabilities with other lenders such as loans or hire purchase agreements and the repayments are proving difficult to maintain.

There are a number of potential benefits to the business with regard to debt consolidation. For instance, it could be that the interest rate on the commercial mortgage is lower than the interest rates on the other debts that are being consolidated so the business may end up paying back less interest depending of course upon the term of the borrowing. If say the overdrawn current account balance was consolidated onto a commercial mortgage then the repayment of it on a monthly basis may be easier to manage than to try to clear the overdraft over a period of time. The monthly repayments on the commercial mortgage could be less than the total of the monthly repayments on the other debts thus reducing the business’s expenditure. If the above is of interest then you may wish to get some professional, expert advice in this respect.

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