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 years to 30 years and lending on the commercial property value is between 60% to 80%.
Rates on commercial property loans are currently very competitive and lenders are eager to fund clients wishing to purchase and/or refinance commercial properties (which could be factory/warehouses, commercial property or similar).
Taking a commercial loan from a major bank usually involves the borrower transferring all their business banking relationship to that institution, which can be extremely onerous. Major financial institutions also tend to focus on the financial health of the business, rather than just the mortgagor, thereby requiring additional financial statements to assess the transaction. Whilst the banks are using the catch cry, “We are open for business and accepting new to bank clients”, it all comes back to their appetite for the business and the applicant’s credit worthiness.
We have access to mainstream commercial lenders and specialist commercial funders (mainly non-banks) as they have friendlier 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 which major financial institutions have all resigned from several years ago. Some of the second tier lenders also have loan products such as lite-doc, lease-doc and self- declared income for commercial applicants which provide a broader range of finance options for the borrower.
Contact Paul on 0417 567 747 to discuss your current commercial loan or any future commercial finance requirements you may be considering.