Funding options to start or grow a particular business are endless. If you were always on the hunt to start or grow your business whilst including some funding options, then most likely you’ve come across the term ‘Property Finance’.
By definition, Property Finance is a type of finance or a business loan that is secured and is used for the residential and commercial properties as collateral to the secured or borrowed amount. Property finances are extremely viable options while constructing or building business properties, and also in raising funds for expansion and other company or business needs.
The different types of corporate property finances available are:
Commercial property finance
Like the name suggests these types of finances are based on the loans secured against the commercial and the residential properties. The types of loans are mainly sanctioned to borrow the raw materials, and the essentials obligated to start or build a business. Commercial property plans are also keen at alleviating the potential threats and the problems that may arise using the vital operations.
These types of finances are also useful to buy machinery or to pay off the extended debts or bills of a company or a business.
Unlike commercial property loans, Bridging finances are essential for a business or a company to reach a destination, say from point A to point B. The finance or the loan packages for the Bridging Finance lasts anywhere from 12 months to two years, and the borrower ought to return the agreed sum at the end of the tenure in one bullet payment.
They’re generally used for the following:
- To replenish good credit from a bad one
- To pay bills and taxes
- To exhaust ongoing developments
- To keep cash flowing in a business during negative cash flow
- To enable a property purchase
It is also called the term loan, and it offers the benefits as the name suggests and sanctions loans for up to a maximum of seven years. Once done, the loan can be repaid in monthly installments, along with the interest rates. They’re one of the popular ones among all the commercial property financing loans. This is because the sum to be paid gradually reduces, without taking a serious hit on the financial stability of a company.
These types of finances or loans are available for the tenure of five years with a limit in the sum to be borrowed. As the name suggests, these types of loans require the business or the company to pay an interest every month, and the total sum exceeds the sum borrowed, at the end of five years. Despite the lump sum amount that ought to be paid at the end of five years, it is the most secure form of property finances.