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Small businesses and commercial mortgages

Small business owners in Florida who are looking to purchase property for their company's use will typically need to take out a commercial mortgage. Because small businesses often have less capital and fewer assets than larger corporations, there are alternative options available for eligible companies.

According to the Chronicle, commercial loans may be granted for a variety of different properties. These include office buildings, parking structures, shopping centers, hotels, storage facilities, industrial areas and apartment blocks. As with residential loans, commercial mortgages are available with either a variable or fixed rate. The benefit of a variable rate is that the interest is often lower than the fixed rate for the initial part of the loan. However, the interest can increase later down the line and make it challenging for some companies to keep up with the payments.

Businesses who want to control costs may want to consider a 504 loan. According to the Small Business Association, this loan gives smaller companies some of the same benefits that larger entities are able to take advantage of. This includes fixed-rate financing over a longer period of time and a low down payment of 10 percent. Companies who are eligible for this loan can enjoy:

  • Low interest rates - this makes it more affordable for businesses on a monthly basis
  • Low down payments - 10 percent is a great advantage when compared with regular commercial loans, which often require 20 to 30 percent down 
  • Long-term loans - terms are either 10 or 20 years, which also keeps monthly payments low
  • Fixed rates - this allows mortgage rates to stay consistent over the length of the loan

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