Considering purchasing a commercial property?

Commercial Real Estate Finance is a growing type of investment for owner-occupiers, investors and those with a Self- Managed Superfund (SMSF).

Whilst commercial mortgages may appear to be similar to residential mortgages, they do require more specialized criteria and limits. Most commercial loan terms range from 15 to 30 years and the lending on the commercial property value is between 60% to 75%.

In addition, rates on commercial property loans are higher than the rates on normal residential home loans.

Presently, the major banks have many competitive products and very attractive interest rates for commercial property loans. Taking a commercial loan from a major bank usually involves the borrower transferring all their business banking relationships and services to that institution which can be extremely onerous. Also, major financial institutions focus on the financial health of the business, rather than just the mortgagor, thereby requiring additional financial statements in order to assess the application.

Flakus and Associates has access to many mainstream commercial lenders as well as specialist commercial funders who are mainly non-banks. These lenders usually have easier eligibility requirements, fewer loan covenants, longer loan terms and can lend up to 75% of the commercial property valuation. Plus, they also lend to Self-Managed Super Funds (SMSF) which major financial institutions resigned from several years ago.

Some of the second-tier lenders have loan products such as ‘lite doc’, ‘lease doc’ and ‘self-declared income’ for commercial applicants thereby providing a broader range of finance options for the discerning borrower.

If you are in the market to pursue a loan for a commercial property, contact Paul today to discuss your current situation and your options in light of the current economic climate and the opportunities that have emerged with it.


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