Investing in the right commercial property can have the same, if not better, rental yields and capital returns than a residential property. However, if you’re just getting started in the commercial property space, it might be a little daunting when it comes to finance options.

In particular, you might be unsure about how financing a commercial property investment differs to a regular mortgage. Perhaps you’re wondering what the similarities and differences are? Well, Ugo Finances is here to educate and help you through the entire commercial loan process.

When it comes to applying for a commercial property loan, the overall process is the same as residential lending. However, lenders will look for key criteria such as:

  • Your capacity to repay;
  • Your deposit and any available equity; and
  • The type of commercial property you’re looking to purchase, such as, an office space, warehouse, factory or shopfront.

Whilst commercial loans may be less familiar to people, there are actually a variety of loan options available from a wide range of lenders.

At Ugo Finances, we have access to over 45 lenders, including major banks and non-bank lenders. Our strong relationships with these lenders allow our team to find the right loan for each individual.

Our team take the time to understand your finance requirements and guide you through the entire loan process – from application to settlement.

If you’re thinking about buying a commercial property, these are the requirements you’ll face:

  • Commercial property involves paying Goods and Services Tax (GST). GST costs can increase the cost of the property by 10%.
  • Residential leases typically have a loan term of 6 to 12 months, but commercial property leases run for longer terms.
  • Commercial properties have longer vacancy periods, meaning the lessees bear the costs of maintenance, rates and repairs. Keep this in mind when you’re looking to purchase a commercial property.

Contact Us

If you’re looking to break into the commercial property space and would like more information on commercial loans, contact our team on 02 8026 0775 to talk about your loan options.

 

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