Commercial Property Loans - AAP Finance Brokers

Commercial Property Loans

Across Australia, investors seeking stable, long term returns in volatile markets, are now looking at commercial real estate.

Commercial Property Loans work the same way as a typical mortgage over a property, where the lender provides funding secured by the commercial property.

  • There are some key differences to that of a typical residential real estate mortgage:
  • Commercial Property loans have a lower lending value ratio, typically between 65% and 70% of the property value. The reason is that these properties take longer to sell and as a result are deemed a “higher risk” then your home or investment property.
  • Due to this risk they attract higher interest rates and associated regular fees.
  • A loan application or approval fee is higher and can attract up to 0.75% of the lending amount.
  • Assessment of the loan is based on a range of items – business profit and loss statements, length of lease conditions, and personal tax returns.

The benefits of taking out a Commercial Property loan are:

  • You can structure the debt to suit your tax structure – company or trust name, superannuation fund or personal name.
  • Interest and Fees are normally tax deductible.
  • You can borrow in a Self Managed Super Fund.
  • There are options to go interest only, fixed or variable rate, loan split or principle and interest.