Commercial Property Loans

 

What are they?

Commercial property loans are use for the purchase of a commercial property or some other income producing purpose. Example of the types of properties that require commercial lending are;

 

- Retail Shops

- Factories

- Offices

- Car yards

- Farms used for income producing purposes

- Child care centres

- Shopping centres

- Construction of more than 4 properties on the one site

- Some serviced apartments

 

Interest Rates

Interest rates vary significantly from lender to lender and the type of property offered as security. Therefore, interest rates are dependent upon;

 

- Type of security offered

- Zoning and location

- Size and purpose

- Loan amount secured against the property

 

 

Deposit or Security Required

A commercial property can be secured by the actual property itself, by a residential security or a combination of both.

 

The amount you can borrow will depend largely on the properties use and

 

Commercial Property as security - You can lend up to 85% of the properties value with some lenders. Typically, the higher borrowed amount against the properties value the higher the interest rate.

 

Residential property as security - Using a residential property to secure a commercial property offers less risk to the lender and in turn they offer a lower interest rates. Here you use the equity in your home to secure the commercial property.

 

Typically, you can borrow up to 80% of the properties value. You can go to 95% but this often incurs lenders mortgage and may prove to be expensive

 

Using Residential and commercial property as security - This offers another alternative when you do not have adequate equity in your residential security to cover the commercial property. This can lower the over all cost of the loan by using this hybrid type of lending.

 

 

Servicing a Requirements

The lender wants to know hoe are you going to repay the loan. Most lenders will take into account and ask for the following information;

 

- Two years tax returns from business or PAYG income

- A signed lease if used for investment purposes

- Most lenders use 75% of the rental income as a calculation

- Lenders will add back to your income interest expense, depreciation and one off costs

- Other income from investments or alternate sources

 

If you cannot prove how you will service the loan there are lenders that offer another alternative known as low documentation loans.

 

 

Low Documentation Property Loans

Also known as lo doc loans, these are for self employed applicants who cannot show the appropriate documentation to prove their income but can afford to make the repayments by self certifying their income.

 

Certifying your income and self employment status involves;

- ABN for a minimum of 2 years

- A statement from yourself or a statement of  financial position from your accountant

 

Lo doc loans often com with a higher interest rate and amount borrowed against the property is lower.

 

 

How Can We Help?

 

Find a commercial lender that best suits your lending requirements from more than 20 lenders

 

Negotiate a better interest rate and fees

 

Borrow up to 85% of the properties value

 

Low documentation (self -certified) commercial loans up to 75% of the properties value

 

Credit impaired commercial loans for those with poor credit history and or defaults.

 

 

For more information or to get the process started  fill in an enquiry form or call

1300 726 136 for immediate assistance.