How to get investment property loan assistance for commercial property investing

If you’re planning on venturing into commercial property investing, knowing how to get investment property loan assistance can help you finance your purchase easily.

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Can you afford to invest in commercial property?

Commercial property investment requires a significant amount of capital. The first question you should ask yourself is whether you can afford it. If not, what are the other alternatives that you can consider?

To purchase a commercial property—or any property—you need to be able to afford the deposit and also the stamp duty. You also need to secure a loan and be in a position to make regular loan repayments. There will also be other costs involved when purchasing commercial property outright before it can be leased out to a tenant.

So, how can you finance your commercial property purchase and meet these monetary requirements?

How to get investment property loan assistance

Getting a commercial property loan in Australia can be daunting, especially if you’re new to the investment industry and unaware of the proper steps to take. However, once you have a good grasp of the key requirements, you can look forward to a much smoother journey ahead.

While these requirements may differ from one lender to another, there are some general criteria that apply to all commercial lending institutions. Let’s take a closer look.

Credit score

Having a good credit score is paramount to vouch for your financial responsibility and reliability. It’s one of the first factors that any lender will consider before going through your loan application. A high credit score increases your chances of securing a loan with lower interest rates and favourable repayment terms.

Down payment

Loans for commercial properties typically require a larger down payment than residential properties. Generally, lenders expect a down payment of approximately 20% to 30% of the total purchase price of the property. If you’re able to provide a bigger down payment, it can lower your loan repayments and also lower risk.

Income

Lenders may want to know about your income—whether you’re making money as a result of a salary or even from another source such as rental yield. Having a stable and regular income are often some of the first factors that lenders may check. They may also want to see if you’ve been employed for at least 2 years.

Guarantor

If you’re trying to secure a loan for a commercial property but don’t have a good financial standing, then a guarantor can help you out. If you’re going this route, then you need to find a guarantor who has a good credit history and can demonstrate their financial stability to repay the loan in the event you’re unable to.

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FAQs

What are the terms of getting a loan for a commercial property?

The terms can vary depending on the lender and the borrower. But, commercial property loans generally have more terms in comparison to residential properties.

What are the interest rates for commercial property loans?

Interest rates vary from one lender to another and can also depend on the terms of the loan. It’s fair to expect higher interest rates for commercial properties than residential. Get in touch with a commercial buyer's agency to learn more.

Is commercial property investment worth it?

Yes. Commercial property investments provide a much better return than residential properties with the opportunity for higher returns and more passive income generation. You can learn more about commercial property investing here.

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