What is a commercial mortgage?

by Cal Palmieri & Al Mussi 10/30/2023

What is a commercial mortgage featured image

As your business expands and becomes more profitable, you may find yourself on the hunt for a commercial property. Acquiring a commercial mortgage can give you more leeway as a business owner to find a building or complex best suiting your trade. 

Understanding commercial mortgages

A commercial mortgage, also known as a business mortgage, is a loan used to purchase property for the operation of a business. 

A business property is often used to store inventory, as office space for retail operations and more. You can also use a commercial mortgage to refinance a commercial property you already own to make loan terms more agreeable. 

Residential loans versus commercial real estate loans

A commercial loan is usually awarded to corporations, trusts and developers and terms usually fall between 5 and 20 years. 

Residential mortgages are awarded to individual borrowers, often who are seeking residential properties (such as a house to live in), with a 30-year term being the most popular option. 

How do I qualify for a commercial mortgage?

To qualify for a commercial mortgage loan, the property being purchased or refinances should be occupied by no less than 51 percent of your business venture. After this is disclosed, lenders consider the location, profit, credit history and other financial factors to determine if giving you a loan is a good investment. 

A residential mortgage is often associated with higher interest rates and fees, so it pays to shop around as a business owner. Working with a commercial mortgage lender, you can hunt down the best loan plans offering interest rates and terms to your liking.

About the Author

Cal Palmieri & Al Mussi

Al Mussi and Carol-Ann Palmieri have been Realtors for more than 30 years.   They established their team, "The Al and Cal Realty Group" in early 1990.    They did this to give their clients greater exposure as well as enhanced availability, and that all important second opinion.     Quickly they became a trend setting team earning numerous production awards and the respect of their peers.    

Al  is a father of 4, grandfather of 5, a martial arts enthusiast, studying the discipline of Hapkito.  He loves to garden and golf.

Carol-Ann is a former US Marine, a private pilot, avid kayaker and dabbles in pastel painting.  

Al and Cal are committed to providing their clients with unsurpassed service, staying abreast of current market trends and technology. Their goal is provide such unbelievable service that you will refer them to your family and friends.