Considering purchasing a commercial property?
This is still a growing type of investment for owner-occupiers, investors and those with a Self Managed Superfund (SMSF).
As with home loan interest rates, commercial lenders have also passed on their commercial interest rates. If the proposed security is compared against residential security, the interest rate is different to the commercial rate. Some lenders align their commercial rates on a 3-year Bank Bill Swap Rate (known as BBSY). This pricing mechanism moves with the market.
A recent commercial property transaction for my client who borrowed 50% of the purchase price, utilizing his residential unencumbered investment property as security gained a lower interest rate solely against the commercial property. The commercial property purchased can then be utilized for a future acquisition once the market settles.
Whilst finance for a commercial property for a Superfund Asset may seem daunting, Flakus and Associates has access to several funders who are able to fund to SMSF for commercial property purchases at very competitive rates and low fees.
Most commercial loan terms range from 15- to 30-years, and lending on commercial property currently sits between 60% to 80% of the valuation.
Taking a commercial loan from a major bank usually involves the borrower transferring all of their business banking relationships to that institution which can be extremely onerous. Consider non-bank funders for more flexibility and a less onerous business relationship and transaction.
Contact Paul to discuss your current commercial loan or any future commercial finance requirements you may be considering.