There are several pros and cons between renting a property for your business and buying a property through an owner-occupier mortgage.

Pros of Choosing an Owner-Occupier Business Mortgage:

• Your monthly mortgage repayments are likely to be very similar to the monthly rent you would expect to pay.
• There is stability in budgeting for monthly repayments, without accounting for potential rent rises.
• The business may sublet additional space to generate rent to contribute to the mortgage repayments, subject to lender permission.
• Companies have control over how they use the space, including making changes and extensions to allow for business growth as an alternative to relocating.
• The interest paid on the mortgage is tax-deductible.
• As the property grows in value, so too does your business equity and capital balance.

Cons of Business Mortgages vs Renting a Property:

• You will need somewhere between 25% to 40% deposit.
• Relocations can be more complicated since you'll need to sell a property, which is likely to take much longer than ending a rental agreement.
• The business will need to cover all the building repairs and maintenance costs.
• If the property market dips, your building may decrease in value.

The best option when trying to weigh up the pros and cons of any business decision is to consult an expert who offers independent advice.

If you are deciding between renting or buying premises for your business to trade from, give the revolution team a call on 0330 304 3040

Dependent on your circumstances and what you wish to borrow, you might decide on a business loan as an alternative to a commercial mortgage.

Business loans are usually cost-effective if you only need to borrow a proportion of the purchase cost. Examples where this might be the right choice include:

• You need to borrow under £25,000. Generally, if you need less than £50,000, a business mortgage isn't the most viable option given the minimum lending caps and the costs of taking out a mortgage.
• You are happy to borrow through an unsecured loan. Commercial mortgages require security in the form of equity or another asset, whereas business loans do not.
• You expect to pay back the loan in three years or less. In this case, a bridging loan might be a good option provided you have a repayment vehicle in place as an exit strategy.

It really depends on how much you want to borrow, and how long for.

Secured business loans are another option, whereby you use an asset or property as security, and therefore can borrow over and above the usual £25,000 maximum.

However, business loans are generally not cheaper than a commercial mortgage for higher amounts of borrowing, as the interest rates of often steeper.