Commercial Finance
Secure the right loans for commercial properties.
Commercial property can be classified into a standard category and specialist category. The type of commercial property you want to purchase, is one of the key considerations when lenders price the rate and terms of your commercial loan.
Standard Commercial Property
These include:
- Offices
- Factories
- Warehouses
- Retail space
- Shopfronts
- Residential block of units, townhouses, or houses with a commercial use
Specialist Commercial Property
These include:
- Accommodation (hotels, resorts, caravan parks, etc.)
- Aged care centres
- Child care centres
- Farms/rural properties
- Function/reception centres
- Land subdivision
- Petrol stations
- Pubs
- Restaurants
- Supermarkets
- Schools
The Purpose of Commercial Loans
Many lenders view borrowing to invest in commercial properties as lower risk than borrowing to invest in your own business premises. So with the right information and approach, you can often secure great loan terms to suit your needs.
However, understanding the process of commercial lending and proving your capacity to repay can be complex and there’s a lot of variation between property types, so working with an expert will yield the best results.
Income documentation for commercial loans
Income can be evidenced through various methods. These include:
Full doc: this general approach includes providing payslips, or full financial statements, tax returns and potentially BAS statements.
Lease doc: the method relies on the rental income to be generated by the commercial property.
Lo doc: this approach suits businesses who may not have their latest financials and tax returns ready. Alternative income evidence can be accepted such as an accountant’s letter, BAS statements, or bank statements.
Forecasts: this includes providing forward looking profit and loss projections for your business to evidence your business’ ability to cover repayments on an ongoing basis.
Although commercial loans are not policed in the same strict way as residential home loans, you will still need to provide some support for your business’s ability to manage repayments on the commercial loan. A personal guarantee is often required from directors of the business.
TO FIND OUT MORE ABOUT OBTAINING COMMERCIAL FINANCE AND HOW WE CAN HELP YOU
Contact Find Your Property Finance today.