Commercial property loans

Buying your own premises, an investment property for the business, or the warehouse you currently lease. Commercial property lending works differently to a home loan, and the differences are worth understanding before you make an offer.

Commercial lending is more conservative than residential. Expect to contribute more of the purchase price than you would on a house, and expect the lender to look harder at the property's income and its resale market than at the headline valuation.

Specialised property, anything with a single possible use or a thin buyer market, needs a larger contribution than a standard warehouse or office.

If your own business will occupy the premises, lenders can look at your trading performance as well as the property, which usually improves what is available.

For an investment purchase, the lease and the tenant carry the assessment. A long lease to a strong tenant is a very different application to a vacant building.

Property-backed commercial facilities generally price at 6% to 9% p.a., well below unsecured business lending at 9% to 13% p.a.. Indicative ranges only, subject to credit approval.

Terms are typically shorter than a residential mortgage and are often reviewed periodically rather than set and forgotten for 30 years.

This is one of the strongest applications there is. You know the building, you know the outgoings, and the rent you are already paying demonstrates you can service it.

It also converts a permanent cost into an asset, and removes the risk of a landlord ending the lease on a site your business depends on.

Tell us what you are funding and we will benchmark it across the panel. Call 0412 833 197 or request a quote.