Small businesses ''should buy property'' - commercial mortgages

13 June 2007

Small businesses should buy property rather than rent so that they can accrue equity in the long term, it has been suggested.

Business advisers White Rose Finance has said that purchasing a property, and hence taking out commercial mortgages would make obtaining loans and other financial assistance much easier.

Consultant Stuart Woodward advised that such tactics would better equip businesses to be able to garner the money required in order to expand.

"Once you own a commercial property, in the current market it is accruing additional equity. [If you rent] then the freeholder is making the additional equity - so basically when you leave that property you''ve got nothing, you haven''t got anything behind you," Mr Woodward advised.

"If you''ve got some property then you''ve got some equity; you can arrange loans against them. If you''re only a tenant then the odds are you''ll be unable to raise additional finances if and when you require them," he added.