Commercial Property Loans

1. Full Documentation: Provide standard income proof like tax returns, pay slips, or business financial statements.
2. Lease Documentation: If leasing the property, provide lease agreements showing rental income covering loan repayments.
3. Low Documentation: Use bank or BAS statements, business forecasts, or a letter from your accountant to verify repayment capacity.
4. No Documentation: Specialist lenders may offer loans without documentation, but expect higher interest rates and fees.

1. Interest Rates: Fixed or variable rates. Fixed rates are generally locked for up to 5 years.
2. Repayment Terms: Principal and interest loans typically have a 15-year term, while interest-only loans have a 5-year term.
3. Additional Features: Options like redraw facilities, lines of credit, or offset accounts may be available but often come with higher rates or fees.

Switching business banking to the loan-providing lender is often required. However, if residential property collateral fully covers the loan, you might avoid switching banks. 

What is the commercial property loan application process? 

1. Higher Deposit: Deposits of 20% or more may be required, depending on the loan type and property.
2. Guarantor: A guarantor may be needed to assume responsibility if you default on repayments.

1. Have a Strong Application: Provide comprehensive evidence to show you are a low-risk borrower.
2. Be Prepared to Negotiate: Larger loans offer more negotiation leverage.

Select a property in a high-traffic area, accessible by public transport, and surrounded by complementary businesses to retain value and generate secure income.

High-risk or large loans may require annual reviews, including updated financial statements and business forecasts. This can affect loan terms, so accurate presentation is crucial. Improved circumstances can lead to better loan terms.

Expert commercial property mortgage brokers at VOXFIN can simplify the process by offering market insights, helping choose the right lender, preparing and submitting your application, and negotiating the best terms on your behalf. Call us at 037065200 to discuss your scenario.

Yes, you can purchase a commercial property under a family trust. Doing so offers several potential benefits but also involves specific considerations and steps. Here are the key points to keep in mind:

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1. Asset Protection: A family trust can help protect the property from creditors and legal claims against individual beneficiaries.
2. Tax Efficiency: Trusts can offer tax benefits, such as income distribution to beneficiaries in lower tax brackets, which can optimize tax liabilities.
3. Estate Planning: Trusts facilitate the smooth transfer of assets to future generations, aligning with estate planning goals.

Steps and Considerations 

1. Trust Deed: Ensure your trust deed allows for the purchase of commercial property. Review the terms with your legal advisor.
2. Lender Requirements: Lenders may have specific requirements for loans to family trusts. Be prepared to provide detailed documentation, including the trust deed and financial statements.
3. Guarantors: Lenders might require personal guarantees from the trust’s beneficiaries or trustees.
4. Tax Implications: Understand the tax implications, including potential stamp duty and capital gains tax considerations. Consult with a tax advisor to optimize benefits.
5. Legal and Financial Advice: Seek professional advice to navigate the complexities of purchasing property through a trust and to ensure compliance with relevant laws and regulations.
6. Loan Structure: Be aware that the loan structure might differ when borrowing through a trust. Lenders may offer specific products tailored to trusts.