SHORT TERM MORTGAGE FOR COMMERCIAL PROPERTIES

2007-05-02 10:04:19

( Financial )



Business owners can avail of short term mortgage programs for their commercial properties. They can use this option to develop their commercial properties into viable business areas. The term usually ranges from one year to five years.

Short term mortgage has the advantage of lesser prepayment penalties and has no lock out fees involved in long term mortgage. The absence of these fees can save businessmen a lot of cash that they can use to finance other productive business expenses.

Commercial short term mortgage gives businessmen the opportunity to pay lesser interest payments compared to a long term mortgage where the accumulated interest payments are higher. However, you will pay higher amount of principal payment compared with short term mortgage compared to long term mortgage.

Short term loans for commercial purposes are easily available to businesses engaged in office, retail, warehouse and multiple use commercial properties. The reason might be due to the fact that these businesses have regular inflow of cash to pay off amortizations of short term mortgage.

Businesses can avail other forms of short term financing aside from short term mortgages to generate funds. Lines of credit, accounts receivables financing and zero balance accounts are types of short term financing that business can resort to when they are not able to avail of short term mortgage.

Lines of credit are a way to secure a loan from lenders. Businesses reserved access for credit for their projects and draws money from it whenever they need funds for every stage of project implementation. Account receivables financing helps businesses manage their cash flow by providing funds with their account receivables put up as collateral. Lenders require specific invoices to finance account receivables. Zero balance accounts are almost similar with businessmen privilege of overdraft checking accounts. Customer payments decrease the balance of businessmen’s loan as they submit payments to their checking accounts which directly connect to loan payments.


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