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Commercial Loans
Commercial loans differ from residential mortgages primarily because they're
used to finance commercial property. The property may technically be a
residence, but if it's used as a commercial venture-for example, a large
apartment building rented out for its income potential-a commercial real estate
loan is generally required.
You can have a fixed or variable interest rate. The fixed interest rate
obviously reduces the hassles that interest rate volatility can create.
Alternatively, with a variable interest rate, you have an interest rate that
changes in line with market forces and there are no additional costs for full or
partial early repayment
Tips for successful business loans
When lenders qualify customers for a commercial mortgage, the credit history of
the business and its directors is taken into consideration, and the risk of the
commercial venture itself is carefully evaluated. The better you can present a
successful business plan, the more likely you will be convincing lenders to
approve your loan on favourable terms. For instance, if an office building has
good tenants and a positive, profitable track record, lenders will be more
inclined to lend money to help an investor buy it than they would for a building
with vacancies or negative cash flow.
Commercial loans carry either fixed or adjustable interest rates, and many
charge penalties for prepayment. Most commercial loans are structured with a
balloon payment that comes due after five, 10, or 15 years, although some have
fixed 30-year schedules. And commercial real estate loans are sometimes created
as bridge loans, to help borrowers finance projects until they get off the
ground. For instance, a developer might use a two- or three- year bridge loan to
borrow money to build a shopping centre, and then refinance to a longer loan
once the shops are occupied and tenants are providing a steady cash flow of
rents to the developer.
Commercial Rate Loans
Commercial Rate Loans provide business customers access to market related
interest rates. This facility is designed for commercial purposes such as
property development, business acquisitions or investment opportunities.
Features of Commercial Loans
flexible account options to meet your business needs:
Variable Commercial Rate Loan
Interest Capitalised Variable Commercial Rate Loan
Fixed Commercial Rate Loan
Interest Prepaid Commercial Rate Loan
range of interest period options to suit your cash flow requirements
progress draws available
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