Can I Have A Mortgage In My Business Name?

mikeopvc

Is it possible to get a mortgage under a business name?

I run a small firm from home and pay monthly rent for 2 storage containers to hold goods, work tools and equipment etc.
I've seen a couple of lock ups for sale locally which I'm sure would cost less per month with an interest only mortgage, I don't really know how to go about it or if it's even possible but if anyone has any thoughts or suggestions I'd be happy to read them

thanks

Mike

silvercar

It is possible. There are liability implications (the business will have an asset) and tax implications.

You need to compare buying the lock-up in the name of the business against buying the lock -up yourself and renting it to your business.

Generally the interest rate charged for a business borrowing would be slightly higher than on a mortgage, or you could ask your business bank what they can offer you.

If you bought it yourself you could look at a mortgage secured on the lock-up (not sure how easy that is) or increasing your residential mortgage to buy it. In both cases the mortgage interest would be an allowable expense against the rental income.

mikeopvc

Oh I see so a commercial mortgage would cost more then a personal mortgage would it?

Would the business need to offer some form of security in which case i would be stuck as I only have a couple of vans and tools.

Would It just be better to get a personal mortgage and let thebusiness pay for it?

silvercar

Oh I see so a commercial mortgage would cost more then a personal mortgage would it?

Yes

Would the business need to offer some form of security in which case i would be stuck as I only have a couple of vans and tools.

The lock-up would be the security for the loan. The lender may also require a personal guarantee.

Would It just be better to get a personal mortgage and let thebusiness pay for it?

You have to do the calculations and see which works out cheaper.

opinions4u

Consider the implications of securing business debt on your home very carefully.

mikeopvc

opinions4u wrote: »

Consider the implications of securing business debt on your home very carefully.

Thanks for you concerns opinions4u, I'm sure it will be fine though.

I figured I already pay £200 per month to rent and have done for 2 years now, this is dead money as far as I'm concerned, (I used to rent a house before getting on the property ladder and hated every payment)

How much would an interest only mortgage be for say £40,000?
If it's less than £200 a month then obviously I would continue to pay the full £200 to help reduce the balance.

Mike