Businesses have to make an important decision regarding premises where operations are to be carried. It is a buy or rent decision. By acquiring a property on rent, one is required to make a small monthly or quarterly payment. However, even after paying rental for innumerable months you are not able to make inroads into property ladder.

Buying property, on other hand, will be intricately difficult for a newly set up business. This will require a bigger investment. Obviously, share of production in capital lessens. Commercial mortgages provide a solution to this paradoxical situation.

Businesses where real estate holds an important place will benefit most from commercial mortgages. Running hotels and resorts from rented properties is a cheaper short-term solution. However if you plan to stay longer, it will be necessary to learn drawbacks. The property owner may raise rental or does not renew lease. Moving operations to a new place will be more inconvenient for these businesses.

Commercial mortgage creates an asset in form of real estate. The organization can fall back on premises for help in times of recession. Because of higher risk involved rate of interest is usually higher in commercial mortgages, as compared to residential mortgages.

Ever thought why grocer sells goods on deferred payment- because of a good credit that you enjoy. Credit is reputation or standing that a person has in society. Though credit includes various non-financial aspects, our study primarily includes financial aspect.

The lending community watches every financial transaction of person in question with its hawkish sight, and classifies cases from excellent to worst. One cannot be sure of staying on a particular credit rating for a long time, owing to volatile nature of credit reports.

A single instance of default or late payment can tarnish credit for a long time. Having contracted bad credit once, you would always find yourself facing same situation, unless some serious efforts are taken to get out of muck.

Do you think that issue is insignificant to your case? Think again. Checking with your counterpart having a good credit rating will reveal higher rate of interest being charged by you. The reason for this extra charge is a bad credit tag that accompanies your credit report. It will be much easier for a person with good credit to get a loan than for a person with bad credit.