Whether you are purchasing a warehouse, office, childcare centre, retail shop, medical suite, industrial unit or other commercial premises, the right lender and structure can make a significant difference to the outcome.
I assist clients with both owner-occupied commercial property purchases and commercial investment property purchases. This may include buying premises for your own business to operate from, purchasing a leased commercial property for investment income, or refinancing an existing commercial property loan.
My role is to review the property, income position, security, ownership structure and lender options, then present the application clearly so the lender can understand the strength of the transaction.
When I can help
Clients usually come to me when they want to:
- purchase a warehouse, office, shopfront, childcare centre, medical suite or industrial unit;
- buy commercial premises for their own business to occupy;
- purchase a leased commercial property as an investment;
- refinance an existing commercial property loan;
- release equity from a commercial property;
- fund a commercial purchase in personal names, company, trust or SMSF structure;
- understand the deposit and LVR required for a commercial property;
- assess whether lease income or business income can support the loan;
- compare mainstream commercial, SMSF, specialist or private lender options.
What a lender looks at
None of this is secret. It is just rarely written down for the person it is being applied to.
- Property type and location
- Lenders assess the type of commercial property being purchased, including whether it is a warehouse, office, retail shop, childcare centre, medical suite, industrial property or mixed-use premises. The location, zoning, condition, marketability and alternative use of the property can all affect lender appetite, valuation and LVR.
- Owner-occupied or investment use
- For an owner-occupied commercial property, the lender will usually assess the strength of the business that will operate from the premises. For a commercial investment property, the lender will focus more heavily on the lease, tenant, rental income, lease expiry, options, vacancy risk and market rent.
- Lease and tenant position
- Where the property is leased, lenders will review the lease agreement, tenant profile, rental income, outgoings, lease term, options and whether the lease is arm’s length or related-party. A strong lease can support the application, while a vacant property, short lease or related-party lease may require further explanation.
- Income and servicing
- Lenders need to understand how the loan will be repaid. This may involve business financials, tax returns, BAS, bank statements, lease income, rental appraisals or SMSF contribution evidence, depending on the borrower and ownership structure.
- Ownership structure
- Commercial property may be purchased in personal names, through a company, trust or SMSF. Each structure can affect lender choice, documentation, guarantees, loan term, LVR, servicing and future flexibility. I can explain the lending implications, while your accountant, solicitor or financial adviser can advise on the tax, legal and asset protection considerations.
- Deposit, LVR and security
- Commercial property lending often requires a larger deposit than standard residential lending. The available LVR depends on the property type, location, borrower strength, lease position, loan purpose and lender policy. Some purchases may require additional security, while others may be assessed against the commercial property alone.
What I will ask you for
Depending on your situation, I may ask for:
- contract of sale or property details;
- property type, location and intended use;
- lease agreement, rental appraisal or tenant details;
- whether the property will be owner-occupied or investment;
- proposed ownership structure;
- financial statements, tax returns, BAS or business bank statements;
- existing loan statements and security details;
- evidence of deposit or equity contribution;
- SMSF documents if purchasing through super;
- company or trust documents where applicable;
- accountant or solicitor input where structure is important.
What you receive from me
- You receive a clear assessment of the proposed commercial property purchase and how lenders are likely to view the transaction.
- You receive a comparison of suitable lender options based on the property type, ownership structure, income position and loan purpose.
- You receive an explanation of the proposed loan structure, including LVR, loan term, repayment type, security, guarantees, fees and key conditions.
- You receive guidance on whether the transaction is better suited to mainstream commercial lending, SMSF lending, specialist lending or private lending.
- You receive a clear document checklist so the application can be prepared properly before submission.
- You receive disclosure of how I am paid and by whom before you authorise the application to proceed.
Questions worth asking any broker
Including me. A good broker should be able to answer these clearly:
- What LVR and loan term are realistically available for this type of commercial property?
- Is the lender relying on lease income, business income, SMSF income or another source of repayment?
- How does the ownership structure affect the lender options and approval outcome?
- What guarantees, security and supporting documents will the lender require?
- If the property is vacant, owner-occupied or leased to a related business, how will the lender assess it?
Commercial property, assessed properly
Commercial property finance requires the property, borrower and structure to be assessed together.
Whether you are buying a childcare centre, warehouse, office, shopfront, industrial unit or other commercial premises, I can help you understand the lender options, deposit requirements, servicing position and finance structure before the application is submitted.
A 30-minute obligation-free consultation to understand your full financial position, goals and objectives, so I can identify how I may be able to help with your finance needs. Commercial and specialist files may attract a fee, and you will know the amount before any work starts.