Advantages

• Retain Ownership. Probably the biggest advantage to taking out a commercial mortgage over other financing options is that you retain ownership of the business, where as by inviting investors into the company, you would not have this total control. The lender is only entitled to an interest return on the mortgage, rather than owning a percentage of the company, something an investor would expect. Also he/she can only exercise the right if you default. You retain all the benefits of ownership in an asset that has the potential to appreciate in value.
  
  
• Better Cash Flow. A mortgage allows you to access capital with minimal up-front payments and offers the flexibility to design a repayment schedule that is tailored to your needs.
  
  
• Maximize Financial Leverage. By financing your property purchase with a mortgage, you can then use your cash flow to take care of other pressing needs and demands.
  
  
• Simplified Cash Flow Management. Because you are sticking to a strict repayment schedule, your cash management situation is more predictable, meaning you will not be as tempted to spend more than you know you can afford.
  
  
• Tax advantage. Interest payments on your mortgage are tax deductible and are made with pre-tax money. Purchases financed with profits, in contrast, are, made with after-tax money.

Saturday, September 06, 2008