What are Commercial Loans?
Commercial loans are for buying commercial properties, for commercial developments, commercial assets, and businesses. Commercial loans are secured usually by commercial property or residential properties collateralized. Commercial loans traditionally have 15 years terms and can be ether fixed or variable.
Commercial loans can be briefly categorised into the following types:
- Owner Occupied Property loan:
This type of loan is for funding properties occupied by owners to run their business.
- Investment Property loan:
This type of loan is used for investment in commercial property where the property is generally rented out.
- Commercial Development loan:
This type of loan is for funding property development. To get a detailed understanding of this type of loan please refer to the blog https://www.credithub.com.au/a-guide-to-property-development-loans/
Why should you refinance?
There are many underlying reasons to review your current loan portfolio and to keep yourself updated. Businesses and investors sometimes are victims of not reviewing their existing commercial property loan. It is a smart practice to review your commercial loan on a timely manner. If the property is investment or owner occupied, then it makes even more sense to review the existing loan portfolio.
The benefits of refinancing are:
- Cashflow Boost & Business Expansion:
Refinancing existing commercial loan to a better rate can give an instant boost of cash flow to the applicant. This could be a review of the current market offering or for buying any such property.
- To Update Commercial Loan Facility to a Newer or Better Product:
In the recent time commercial property finance market has evolved a lot and it is easier to get a loan for a longer term of 30 years. It is always recommended to review and update to make sure that you are not paying more than what you should for your loan.
- Rising Interest rate:
With the recent interest rate hike in Australia and recent equity built up, it is the right time to review your existing loan portfolio to get a better deal. Number of banks offering competitive rate in the market than the existing loan can benefit the business in short or long term.
- To use the equity in business development:
Commercial loans refinancing is like a health check of the existing loan and can benefit you with some immediate cash flow to the business. You can take out the equity from your existing commercial loan and use the fund in business development.
Current Commercial Loan Product at View
Let us have a look at the products available in the market now.
- Long term loan:
Commercial property loans are now available for longer term of 30 years. Refinancing your commercial property loan can give you the opportunity to extend the term of your loan from 15 years to 30 years which will help in reducing the monthly repayment for the loan.
- Interest Only Loan:
There are some commercial loans in the market that offers a lower initial repayment. During this period, the repayments are calculated only on the interest of the amount borrowed and not on the principal.
- Low Doc/No Doc:
As the names suggest, low doc and no doc commercial loans have the benefit of very little paperwork, swift financial results and there are low chances of fall over.
- Commercial Lease Doc Loan for Investors:
A lease doc loan does not require full evidence of the borrower’s income and instead the lender looks into the strength of the rent income from the property used to secure the loan.
- Unlimited Cash Out:
Unlimited cash out options are now available in commercial property loans, which allows to extract the equity from the property. In simple words a commercial real estate investor can take out the cash that is stuck in an illiquid investment.
Why choose a mortgage broker for refinancing?
A broker generally has access to over 50+ lenders including bank and non-bank small lenders. Going to a bank directly or approaching a mortgage broker is a personal choice but broker is like a one-stop-shop, and they will do all the leg work for you.
As a mortgage broker, Credit Hub Australia team go into bat for clients every day to ensure they’re not paying too much for finance that isn’t as competitive as it could be. And the team look at each client’s individual circumstances to make sure they have the right commercial finance in place.
With access to hundreds of different loan products from Australia’s leading lenders, our team can negotiate great rates on deals that suit you, not one that necessarily suits your bank manager. And remember, we do all the hard work for you, managing the process from start to finish – at no cost to you for our service.
If you’re wondering if you can get a better rate in the market for your existing loan, then wait no further and let’s talk. The market has changed and I’m sure your circumstances have changed too. A quick glance at your file, and our expert team can tell if it is time to review your loan and ensure that you’re still in the right mortgage solution. Call our friendly team at 1300782944 or leave us your contact details in Facebook, we will look after you.
By: Nitishikha Gogoi Bhuyan