Commercial loans

Are you a business owner looking to buy a commercial property? There is a good chance you will need to borrow a portion of the purchase price through a commercial property loan.

Unlike residential loans, lenders view commercial property loans as a riskier investment, largely because vacancy periods can be extensive. As a result, commercial property loans tend to have slight differences, such as; higher interest rates, lower maximum LVR’s and higher upfront and ongoing fees. The purpose of your property can also affect how lenders assess your loan application.

Commercial property loans come in both fixed and variable options, with lenders offering funding for a wide range of commercial properties, such as:

• Accommodation (Hotels, Motels, Resorts, etc);
• Childcare centres;
• Factories;
• Industrial sites;
• Retail outlets;
• Restaurants and pubs; and,
• Office spaces.

 Key differences between commercial and residential properties include:

• 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%.
• 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. In residential properties, the property owner is responsible for these expenses.

Would you like to learn more about Commercial Loans?

Contact us on 0431 080 470 or info@speddingfinance.com.au or fill out our contact form and we will be in touch.