This Year Is The Year Of The Commercial Mortgage!

There can be no denying that British business has been under the boot the last few years with the recession and credit crunch making loans and commercial mortgages difficult to obtain. Small and medium sized companies have been grinding forward without much help from the banks, the negative publicity and pressure towards banks over their negative and regressive lending policies hasn't made much difference. Even at a time when 'Loan to values' are at a low, when they need to be at a high for business to thrive.

However, there are signs that the situation will improve significantly in 2011. The Government is expecting lenders to increase their lending in 2011 with some insiders hoping that commercial lending will rise by as much as 10 per cent in the next twelve months.

So for anyone who has struggled to gain a commercial mortgage, or has been avoiding applying for these very reasons, now is the time to go for one.

More money in the banks equals more Commercial Mortgages: It has been speculated by numerous media reports that all the major UK banks are currently in some rather heated talks with the Government Treasury over commercial loans and mortgages. By all accounts, the Government is pushing banks to lend more by giving them a target of over £2bn to lend this year alone. The Chancellor has expressed particular interest in the subject, showing a willingness to counteract the effects of the recession on small businesses.

MP's are worried though that it's another empty promise from the banks; they've already reneged on promises on bank bonuses. Opposition MP's in particular are calling for the agreement to have substance, with sanctions for banks that fail to keep their word. "It would be total nonsense unless there are sanctions for failure" said Lib Dem treasury spokesman Lord Oakeshott recently.

While the current lending criteria and restriction particulars lay rather unclear, it certainly seems that an improvement in commercial mortgage lending will be on the cards in 2011, providing the already volatile relationship between the Banks and the Government remains relatively unscathed. Loosened restrictions and an increase in LTV's make this year an extremely attractive one for any consumer looking to obtain commercial property finance.

Expand your business as the economy recovers: With the British economy expected to improve in 2011, it is the perfect time to think of expansion. And, a commercial mortgage can help you raise the finance you need to expand your operations or to invest in new stock, machinery or premises.

Buying a property with a commercial mortgage can provide you with the extra space you need to grow your business, the stability you need for long term planning and the reassurance that you are asset building. You could also benefit from a commercial mortgage's tax deductibility.

Interest rates are at a record low: Interest rates are currently at record low levels, with the Bank of England Base rate sticking at a tiny 0.5%. While experts warn that this will inevitably rise at some point, all the evidence suggests that it will remain at this level for the majority of 2011 at least. So take advantage of this; now is the perfect opportunity to consider a commercial mortgage.

Economists stress that the base rate is still at a higher level than it was before the recessions, although what is important to note in this regard is that commercial mortgages and business loans will still benefit from low rates. Also, consider a fixed rate mortgage which fixes your interest rate so it does not fluctuate along with the base rate. This way, should the base rate increase your loan rate will remain unaffected making life more predictable.


------

This article was written by financial expert Timothy Frodsham, who writes for Just Commercial Mortgages who specialise in providing information on buy-to-let, commercial mortgages, commercial property finance and offer a service to find the very best commercial mortgage rates available in the market.