What can I use a commercial loan for?

Share your concerns & ideas about commercial property loans in Australia.
awesome
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Joined: Thu Mar 12, 2015 5:56 pm

What can I use a commercial loan for?

Postby awesome » Tue May 12, 2015 4:22 pm

Hi home loan experts,

I recently got to learn about commercial loans through a friend. He explained to me that such loans can be used to invest in property. However, he didn’t seem to have any idea on how difficult it can be to get the loan approved.

Can anyone in this forum help me be clear on this?

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Otto Dargan
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Re: What can I use a commercial loan for?

Postby Otto Dargan » Wed May 13, 2015 11:11 am

Hi and welcome to the forums awesome.

Lenders may evaluate your commercial property loan application based on the purpose of the loan. If you’ll be using the loan for:
  • An investment, then it may be considered a low risk loan, and it may be easier for you to qualify for it.
  • The purchase of an owner occupied property, then it will be considered a medium risk loan. This applies when you’re taking out the loan to buy or refinance a commercial property that’s leased to or occupied by your own business.
  • Working capital, then it will be considered a high risk loan. It may be difficult to take out the loan if you plan to finance the day to day operations of your business.
  • Any other purposes, whether it’s commercial, business, or for investment purposes, it will be evaluated on a case by case basis.
However, it should be noted that some commercial lenders may not approve your application if you’re using a commercial property as security for a loan that’s not used for business or investment purposes.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

awesome
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Joined: Thu Mar 12, 2015 5:56 pm

Re: What can I use a commercial loan for?

Postby awesome » Wed May 13, 2015 2:21 pm

I had no idea a commercial loan could also be used for purposes other than investment. Thanks for that info, Otto!

So if I purchase a commercial property, then how much can I borrow?

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Otto Dargan
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Re: What can I use a commercial loan for?

Postby Otto Dargan » Thu May 14, 2015 9:22 am

Hi awesome,

Most lenders may be willing to lend you:
  • 80% of the property value for a loan up to $1 million.
  • 75% of the property value for a loan up to $2 million.
  • 70% of the property value for a loan up to $5 million.
Lenders may consider your application on a case by case basis if you are taking out a loan anywhere from $5 million up to $50 million.

It is important to note that other factors such as the nature of your security may also determine the amount that you may be able to borrow. For instance,
  • If you are using a residential property as security then you may be able to borrow 100% of its value.
  • If you are taking out a lease doc, low doc, or a no doc loan then you may require a larger deposit.
  • If you are buying a specialised security property then you may require a larger deposit.

If you would like to know more about commercial property loans then you can check out our website. We can also be reached on 1300 889 743 or fill in our free assessment form to see if you qualify for a loan or not.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

awesome
Posts: 11
Joined: Thu Mar 12, 2015 5:56 pm

Re: What can I use a commercial loan for?

Postby awesome » Thu May 14, 2015 11:43 am

I wasn’t entirely sure earlier if I should apply for a commercial loan. But now, I’m fairly positive about it. This has been really informative. I haven’t found a property to invest in yet, so I’ll start looking for one. I’ll give you a call after I find it. Cheers, mate!

rage
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Joined: Thu Mar 12, 2015 5:36 pm

Re: What can I use a commercial loan for?

Postby rage » Mon May 25, 2015 6:35 am

Hello there,

I’m planning to take out a commercial property loan. I’ve found a suitable property but I also need to buy some commercial equipments.

I want to learn about the loan terms the lenders offer for this kind of loan. Can anyone here provide me with that information?

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Otto Dargan
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Re: What can I use a commercial loan for?

Postby Otto Dargan » Mon May 25, 2015 10:49 am

Hi rage,

The term of a commercial property loan is typically determined by the security that is being offered to the lender. They may offer various options for term of a loan, such as:
  • 30 year term: This term is available only if you put a residential property as security.
  • 20 - 25 year term: Some lenders may provide you this term if you put a commercial property as security.
  • 15 year term: Most lenders may offer this term only for a commercial property loan.
  • 5-7 year term: Lenders may offer this term for commercial equipments.
  • Shorter terms: Short terms are normally used for invoice discounting, short term business loans, and development loans.
If you want more information on commercial loans then you can check out our website.

Cheers,
Otto
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

rage
Posts: 10
Joined: Thu Mar 12, 2015 5:36 pm

Re: What can I use a commercial loan for?

Postby rage » Mon May 25, 2015 5:22 pm

That is good to know. I think a 20 year term for the commercial property and a 5 year term for the equipments will be the most suitable for me. I’ll need your help to get approval on it. I’ll give you a call by the end of this week to get started on the application process. Thanks!

KirillZl
Posts: 1
Joined: Tue Sep 06, 2016 11:15 pm

What can I use a commercial loan for

Postby KirillZl » Thu Sep 08, 2016 12:09 am

Hey guys, I plan on hauling some pots this year for tog. What type of line do you guys typically use to rig your pots? 5/16 should be fine for my hauler.


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