Understanding the Meaning and Scope of Commercial Property Loans in Australia
Planning to buy a property to start or expand your business in Australia? Go through this given blog and explore what type of funding and loan options are available for the Australians to purchase a commercial property for their business.
What are commercial property loans?
As most of us already know, a commercial property is the one that is purchased by business owners with an aim of conducting their business operations. Likewise, there’s a commercial property loans that is designed specifically for the business owners and allow them to establish income-producing properties for business use. These loans provide funds that can be used for making investments only in business premises and space and are mostly secured by a lien on the commercial property.
The commercial loan can be taken for a variety of properties. Some of the properties considered eligible for commercial property loan are:
- office space
- retail stores
- factories
- warehouses
- shopping centers
- industrial sites
- residential unit blocks
- specialist properties (medical centers, restaurants or apartment complexes)
Purposes fulfilled by commercial property loans
Apart from just buying a new home to the business, a commercial property loan can be used to serve a variety of other purposes as well. These purposes include:
- Developing existing property
- Developing new property
- Extending current premises
- Residential developments and projects
- Commercial developments and projects
- Buying land
Features of Commercial property loan
- Loan size: There is no maximum size of commercial property loan but the minimum loan size is $300,000.
- Term period: The time period for a commercial property loan ranges from 1 year to 30 years. Out of this, 15 years is the most common loan term.
- Interest rate: For most of the standard commercial properties in Australia, the variable interest rates lie between 3.1% to 6.5%. however, larger commercial loans can be done cheaper than this.
- Amount borrowed: Since every commercial property is different, financing for the commercial property loan is always done on a case-by-case basis.
Commercial property loan providers in Australia
There are several types of commercial banks, private lending institutions, mutual companies, and other financial groups that provide commercial property loans in Australia. Although all of these lenders usually have standards and policies that vary widely, there are however some standard lending criteria that is followed by all commercial loan providers. These are:
- Submission of some basic personal identification documents such identity proof, address and income proof statements.
- additional collateral security, and/or
- a guarantor
If you’re planning to apply for a commercial property loan, we recommend that you should take assistance from a professional lending specialist as it will make the process easy for you.
Your Finance Adviser is a leading group of best home loan brokers of Hornsby, Australia. It is a company that specializes in providing all types of loan advices to people in Australia and has an experience of over 20 years in helping people fulfil their dream of owning a home in Australia. It works with a team of dedicated and licensed home loan broker who are always ready to guide and assist people in achieving financial success.
