Commercial Property Loans: Expert Advice

Commercial property loan structures can be complex and often they differ from regular home loans in that the terms and conditions may be negotiable. By having an experienced spokesperson like Loanscope on your side during the negotiation process, you’re more likely to secure the most competitive deal.

 

Why use Loanscope?

We provide access to an extensive network of commercial loan lenders, including major banks, investment banks, superannuation funds and private lenders. Your Loanscope commercial lending specialist will consider all aspects of your situation and ensure your loan is built around your current and future needs. Time is money, which is why we work quickly to secure your finance, so that you can focus on business as usual. Best of all, we do not charge clients for our expert advice, as the lender pays us once your loan has been finalised.

 

How do commercial property loans work?

Like with residential lending, you must choose between variable and fixed rates, or a combination of both; principal and interest loan repayments or interest-only; and the features you are most likely to need. Loanscope can set up a line of credit for your commercial property loan, allowing you to draw funding out, up to a certain limit. The benefit of a line of credit is that you only pay interest on what you’ve drawn down.

 

How much can I borrow?

Each lender has its own maximum loan amounts, and Loanscope will explain any restrictions. The type of commercial property loan and nature of your security will influence how much you can borrow. A larger deposit (at least 30% of the purchase price) is usually required, but if you are a homeowner you can offer your property as collateral for the loan. Other securities may include offices and office blocks, factories and industrial sites, warehouses and retail shops.

 

Considerations

GST: Investors should keep in mind that GST applies when buying a commercial property, so be sure to allow an extra 10% on top of the purchase price. GST can be claimed back as an input tax credit against GST charged on the property’s rent.

Costs: Maintenance, repairs and rates are usually the responsibility of the lessee, not the landlord for a commercial property. Make sure your lease specifies who’s liable for what clearly.

Use: Be sure to consider the intended use of the commercial property, as this can place restrictions on the type of tenants you may attract.

 

It all starts with a phone call…

Our lending specialists are ready and waiting to discuss all of your commercial property lending needs. Please get in touch.