Commercial Loans

Whether you’re looking to purchase your next commercial property or would like more information on commercial loans, we can help you.

Securing a commercial loan

When it comes to commercial properties, they typically offer a higher rate of return, but they can also have longer vacancy periods which can put pressure on investors. As such, commercial property loans are assessed differently to residential home loans. One of the main differences is that the amount you can borrow is largely determined by the type of property and the purpose of the loan.

Purchasing for investment, for example, is considered lower risk than purchasing your own business premises. For more information on commercial loans, continue scrolling or speak to a BFMS broker today…

When applying for a commercial loan, lenders will look at:

Your capacity to repay – all of your income including expected rental income from the commercial property.
Your deposit and any available equity.
The type of commercial property – whether it’s a factory, office, warehouse or shop-front and its location, together with a valuer’s report.
Details of the commercial property lease and conditions.

Key differences between commercial and residential properties

If you are unfamiliar with the key differences between commercial and residential properties, we have listed a few key points below.

Residential leases typically have a term of 6 to 12 months, while commercial property leases run for longer terms.
Commercial properties feature longer vacancy periods and the lessee bears the costs of maintenance, rates and repairs. This means the property owners pocket more of the rent as profit.
Buying a commercial property involves paying Goods and Services Tax (GST), which may increase the cost of the property you’re looking to purchase by 10%.
In residential properties, the property owner is responsible for these expenses.

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