Any way to borrow more than 80% on a commercial loan?

Share your concerns & ideas about commercial property loans in Australia.
adele
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Joined: Thu Mar 12, 2015 5:43 pm

Any way to borrow more than 80% on a commercial loan?

Postby adele » Wed Jan 06, 2016 12:31 pm

Hi, I am considering to buy a commercial property and I have saved a 15% or so deposit as of now. I want to get a commercial property loan to finance the purchase but I have found that I may only be able to get 60% to 80% of the value of the property in my loan. Does anyone here know if there is a way to borrow more than that amount?

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Otto Dargan
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Re: Any way to borrow more than 80% on a commercial loan?

Postby Otto Dargan » Wed Jan 06, 2016 3:58 pm

Hello adele.

Welcome to the forums.

There are three ways you can borrow up to 100% on a commercial loan:
  • Using equity in existing property - You can borrow up to 80% of the value of a residential property or 70% of the value of a commercial property in equity to finance your purchase. Please note that specialised commercial properties such as farmland will be limited to 50% to 60% of the property value in equity.
  • Taking the help of a guarantor - By taking the help of your parents, a friend or a business partner as a guarantor for your mortgage, you can borrow up to 100% in a commercial property loan.
  • Balance sheet lend - Some lenders can do a balance sheet lend, which is basically lending against the value in your business. Here, lenders take assets such as trail books, equipment and vehicles as security against the loan but generally won't lend against their full value.
If there's anything more you'd like to know, please feel free to ask.

Cheers,
Otto
Otto Dargan
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adele
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Joined: Thu Mar 12, 2015 5:43 pm

Re: Any way to borrow more than 80% on a commercial loan?

Postby adele » Thu Jan 07, 2016 9:54 am

Hi Otto, thanks for replying. I understand that doctors can get discounts on mortgages. I am actually a dentist so technically I should be considered a doctor, shouldn't I? To be clear, I am purchasing a commercial property to establish my dental practice.

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Otto Dargan
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Re: Any way to borrow more than 80% on a commercial loan?

Postby Otto Dargan » Thu Jan 07, 2016 2:23 pm

Hi adele,

Yes, dentists do qualify for doctor mortgage discounts. Since you're buying a commercial property to establish your dental practice and use it as your business premises, you can instead qualify for a dental practice loan.

With this loan, you can borrow up to 100% of the purchase costs without a deposit! However, note that the maximum loan term for freehold property will be 25 years and for leasehold will be 15 years or per the lease agreement.

Our mortgage brokers specialise in commercial property loans and mortgages for dentists and other doctors. You can discuss your situation and loan needs with one of our credit specialists directly by calling us on 1300 889 743 or you can enquire online.

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

adele
Posts: 14
Joined: Thu Mar 12, 2015 5:43 pm

Re: Any way to borrow more than 80% on a commercial loan?

Postby adele » Fri Jan 08, 2016 9:10 am

Hi Otto, that is just splendid. I am very glad to have stumbled upon this forum. You have been very helpful and very prompt with your replies. I will call you as soon as I am free. There is much to discuss. Talk to you soon.

Roman Bust
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Re: Any way to borrow more than 80% on a commercial loan?

Postby Roman Bust » Wed Mar 30, 2016 3:54 pm

Hi everyone,

I was considering to go with a lender that can do a balance sheet lend so I could do a rent roll finance but I'm not entirely sure about the features of this type of finance. Can anyone tell me a bit about this?

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Otto Dargan
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Re: Any way to borrow more than 80% on a commercial loan?

Postby Otto Dargan » Thu Mar 31, 2016 8:02 am

Hi Roman Bust,

Note that when valuing a rent roll, lenders will look at various factors such as management risk, and tenants and properties under management.

Here are some features of a rent roll finance lend:
  • You can borrow up to 60% of the purchase price or bank valuation, whichever is lower.
  • The maximum loan term will be 10 years.
  • You can pay interest only for 3 years.
  • Loan amounts over $5 million will be assessed case by case.
  • You'll need to provide a business plan and have at least 3 years experience in managing a rent roll or real estate agency.
  • Monthly or quarterly reviews are also typically required.
Please give us a call or go through our website for more details.

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

Roman Bust
Posts: 8
Joined: Tue Jun 07, 2016 11:31 am

Re: Any way to borrow more than 80% on a commercial loan?

Postby Roman Bust » Thu Mar 31, 2016 3:17 pm

Thank you, Otto. I will check out that link to learn more. I will most likely call you in the next couple of days to find out how to proceed with this. Bye.


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