COMMERCIAL PROPERTY LOANS
The purpose of commercial property loans is to finance the purchase or improvement of property for business purposes. Typically, they are for more significant amounts than residential property loans. We are a private lender offering commercial property loans in Australia. We provide the best commercial loans for property, business and all purposes. No doc and no credit checks are required. We lend to individuals and companies with bad credit histories.
The most recent available government figures indicate that Australia’s commercial property loan market was worth nearly $250 billion per year before COVID-19. Are you looking for a quick guaranteed approval loan? Contact us by filling our contact form, and we will help you. You can also call us direct at 0439462664.
Property investing and property acquisition opportunities often come and go in a matter of days due to the fast-paced nature of the industry. To complete a transaction quickly or refinance an existing asset at a moment’s notice, suitable funding options are essential.
Our commercial bridge loan provides individuals and businesses with a short-term funding solution. In addition to providing commercial bridge loans, we ensure our clients understand the principal risks and considerations when applying for bridging finance.
What can trade property loans be used for?
You can purchase, build, or renovate the following are examples of properties you can buy, build, or renovate with a commercial property loan.
- Dedicated office space
- Space for retail
- Business-zoned land
- Buildings with multiple residential units or apartments
- Specialist business premises like a motel, restaurant, or car park
How much can you borrow?
For a business property loan, three things determine the amount you can borrow. The purpose of the loan The value of the commercial property (or other assets) you can provide as a security Amount of Deposit
Types of Commercial Property Finance
There are three main categories of commercial property financing.
Take out a loan to buy, construct or refurbish a commercial property you intend to rent to tenants or sell later.
Using a commercial property loan to buy, build or renovate your business premises is one example.
3. Working capital
A commercial property loan would be taken out to finance your business’s day-to-day operations.
Loans secured by commercial property used for investment purposes are considered to be the least risky of these three categories. This assumes the investment’s financials are solid.
On the other hand, commercial property loans for working capital are typically the riskiest type of loan.
If a commercial property loan application is approved, it is clearly affected by the level of risk involved. The risk level also affects the loan’s terms and conditions if it is approved. The lower the risk for the lender, the better the terms and conditions they will offer.
Commercial property loan security
Various types of commercial properties can provide lenders with more security than others. For example, buying an established office building with long-term tenants in place would be viewed as less risky than building premises from scratch without any prior tenant commitments.
Commercial property lenders may require additional security for higher-risk applications, such as other business assets or residential real estate. Depending on your specific situation, this may or may not be necessary.
How much deposit is required?
Generally, the higher the risk associated with the commercial property loan security, the more deposit you also need to provide.
How are commercial loan applications assessed?
The lenders tend to view commercial property finance applications as higher risk than residential property loans, especially if they are for large amounts or for highly specialized properties. This is because commercial properties typically experience higher tenant vacancy rates.
As a result of this generally higher risk, commercial property loan applications often require stricter criteria for approval, especially from major institutions like banks.
Terms and Conditions
Finding and comparing commercial property loan information on the Internet can be challenging. This is because crucial details like interest rates and other important terms and conditions for commercial property loans are often negotiable. They depend on factors such as your financial circumstances, the type of commercial property being bought and its location.
A bank’s strict lending criteria can also make it difficult to get a commercial property loan approved. In a post-COVID-19 Australian economy, these criteria will likely become even more challenging. Applicants will be required to come up with a larger deposit if LVRs are lower.
Getting a commercial property loan through a private lender
For secured commercial property loans, Australians are increasingly turning to non-bank lenders (also known as private lenders).
You can get the following benefits from private lenders over traditional banks.
- Less strict lending criteria
- Faster application and approval processes
- Depending on your business needs, you can tailor the repayment schedule
Furthermore, they are more likely to approve you if you have a poor (or no) credit history or have limited (or no) commercial experience.
We can arrange a private loan for you from our network of over 300 specialist lenders Australia-wide. We specialize in private lending.
What information do you need to provide for a property loan application?
The essential information you need to provide to your lender as part of your application is verifying your property security, deposit and income.
There are four broad options available to you to provide income verification information.
- Full documentation
This information would include your tax returns for at least the last two years plus the accompanying financial statements for your business.
- Lease documentation: This information should show that the regular rental income from your commercial property tenants will exceed your scheduled loan repayments.
- Low doc: A ‘low doc’ application usually only requires a letter from your accountant to confirm that your regular income will cover your regular loan repayments. Alternatively, you could provide your most recent BAS statements as evidence of your ability to make the repayments.
- Forecasts: You could provide forecasts instead of proof of your actual recent income if you’re going into a new commercial property venture. It’s obviously important that those forecasts are realistic.
You should also provide your lender with any relevant information about your business and its history, in addition to your income documentation/forecasts.
A commercial property loan application is more likely to be approved if you provide as much relevant information as possible. It’s important to present a strong case to a suitable lender. As the old saying goes, ‘you don’t get a second chance to make a first impression’. We’ll take the time to understand your needs before matching you with an appropriate private lender. Commercial loans can be more complex to understand. It makes sense to use a broker who fully understands commercial opportunities as we do.
What factors affect my commercial property valuation?
Depending on the level of security your commercial property provides for your loan, your lender will probably value it independently. This valuation may affect the amount of deposit you need to provide.
Here are a few factors that are likely to affect the value of your commercial property.
- Location: In real estate, an old saying says that location, location, location are the three most important factors. It’s a cliché, but it’s true and it applies just as much to commercial property as it does to residential property. Commercial property should be located in an area where there is high demand from tenants or buyers for the type of property (e.g., office space, warehouses, multi-family developments, etc.).
- The condition and appeal of the property: An older, run-down commercial property will be worth less than an older, better-maintained property of the same type.
- Economic conditions and the level of market competition for your commercial property type: A country’s economy always influences the value of commercial and residential properties. In addition, the level of competition for your specific type of commercial property will influence its value. If there is a shortage of its type in a high-demand area, its value will be higher, and vice versa.
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