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Commercial Mortgage - pay off early?
waveneygnome
Posts: 311 Forumite
I work for/own a small business (ltd co).
The business has a commercial loan of £253k on a 15yr term used to purchase existing premises from landlord. Our interest rate is 2.8% above base= 3.3%
Due to tighter credit controls and better profit margin work, we have been able to build up a surplus in our current account....which we earn a massive 0.1%
I think we're doing the right thing by making overpayment on the loan, but I just wanted to get opinions/sounding board.
I've looked at business deposit accounts, but they can't come close to the 3.96% I think we need in order to match the interest we pay on the loan. (3.3% plus 20% tax)
I know this is cheap money now, but we can't foresee any capital needs for the business, and wouldn't be confident in using company money on stocks/shares/investments......I'd rather repay the loan, then invest in stocks & shares ect.
Or....is there anything else a ltd co can do with surplus money?
The business has a commercial loan of £253k on a 15yr term used to purchase existing premises from landlord. Our interest rate is 2.8% above base= 3.3%
Due to tighter credit controls and better profit margin work, we have been able to build up a surplus in our current account....which we earn a massive 0.1%
I think we're doing the right thing by making overpayment on the loan, but I just wanted to get opinions/sounding board.
I've looked at business deposit accounts, but they can't come close to the 3.96% I think we need in order to match the interest we pay on the loan. (3.3% plus 20% tax)
I know this is cheap money now, but we can't foresee any capital needs for the business, and wouldn't be confident in using company money on stocks/shares/investments......I'd rather repay the loan, then invest in stocks & shares ect.
Or....is there anything else a ltd co can do with surplus money?
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