Using Mortgage Solutions For Business Finance
Posted by Mike Prissick from Mike Prissick Mortgage Broker
on 19 March 2008
Using Mortgage Solutions For Business Finance
As owners of small businesses are now counting the cost of the recent interest rate rises and face the prospect of a further rate rise to 6 % later this year, some are turning to the equity in their homes to keep the cost of borrowing down.
I believe that sole traders and small businesses can benefit by re-mortgaging
their homes, before the rates rise again, to fund business expansion: “Raising money by re-mortgaging is the cheapest way of raising capital, especially as many business owners have owned their homes for some time and found that the value of their properties has more than trebled.”
To quote an example from a client of mine, he was a designer who rented a small studio. His business was doing well and he wanted extra finance to expand the business by taking on another designer. His house was valued at over £400,000 yet the mortgage was only £75,000. It was easy to re-mortgage the property for £340,000 - at fixed interest rates to protect him and the business from future rate rises – thus releasing money to expand his business.
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