Commerical Property Loans

The term of a commercial property loan is typically determined by the security that you offer to the bank and its use.

Available terms include:

• 30 year team: available for business owner occupied property or with residential property as security.

• 20-25 year term: available from select lenders with commercial property as security.

• 15 year term: The most common term for commercial property loans.

Different types of security represent different risks to the banks. Standard commercial properties are usually the best type of security for a commercial property loan, such as: offices, factories, warehouses, retail space and shopfronts.

The loan security will also reflect the lenders deposit required.

Because most commercial property loans don't have the same protection as home buyers, the purpose of your loan will affect how your loan is assessed and the deposit required.

Loan Purposes:

• Investment: usually used to buy or refinance a commercial property that will be leased

• Owner-occupied: used to buy or refinance a commercial property that is leased to or occupied by your own business.

• Working capital: cash out or a line of credit used to finance the day to day operations of your business or liquidity shortfalls.

• Full doc: Individuals, companies, trusts and self-managed superannuation funds are acceptable.

• Term: Up to 15 years (longer on application) or up to 30 years for owner occupied or residential security.

• Interest-only: Up to 5 years (longer on application).

• Interest rate type: Variable, fixed (up to 5 years) or bank bill facilities.

• Additional repayments: Allowed on variable loans.

• Redraw: Allowed for amounts that you have pre-paid.

• Offset accounts: Normally not available.

• Line of credit (LOC): Available at higher interest rates.

• Capitalised interest: Available for development or land sub-division finance.