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Commercial finance is used for purchasing commercial properties including service stations, hotels, pubs and clubs, car washes, industrial warehouses, manufacturing plants, storage facilities, cafes, offices, retail stores, shopping centres, car parks, mixed use sites, and special purpose sites.

Finance for commercial property is via special commercial loan products such as term loans, small business loans, business lines of credit, bridging loans, SMSF loans, low doc loans, lease doc loans, and bank bill swap bid rate (BBSY) commercial loans. These loans are offered by a range of lenders, including the major banks, tier 2 lenders, specialist commercial lenders, and capital funds.

Loan terms are usually shorter than residential mortgages, ranging from 3 to 25 years, carry higher fees and interest rates, and often come with conditions known as covenants that the borrower must meet to satisfy the terms of their loan.

There is greater flexibility around the structuring of commercial loan facilities, which can be tailored depending on the transaction and the borrower.

Obtaining approval for commercial property finance is a longer process and can take up to 2 to 3 times longer than residential property finance approval. This is mainly due to the types of checks and analysis that takes place on commercial finance applications, as well as valuation reports taking longer to prepare. Some lenders can provide commercial finance approval and funding in days; however, these products will have unfavourable conditions including high application costs, high interest rates, and short loan terms.

Talk to us about obtaining commercial finance.