When it comes to navigating the commercial loan market, it is important to know the basic facts and figures required for obtaining a commercial loan and how the process works. Organisations that provide commercial loans for commercial property sanction loans for new or existing commercial properties. Every commercial property is different and can require varying levels of structuring depending on the commercial loan type. A straight forward commercial loan would be required for commercial real estate investors and owner occupiers. Whereas highly leveraged structured commercial finance can be needed for a variety of reasons such as refinancing, non recourse, specialised real estate and high LVR solutions. The terms of the commercial loan can be fixed or variable and are given the option of being long term or short term.
In order to successfully obtain a commercial loan there is a certain level of documentation that is required to prove the borrower can sufficiently service the loan. There are four levels of documentation options which can be carried out; full doc, lite doc, low doc and no doc, also known as an asset lend. Full doc commercial loans are for borrowers that can provide all the documents required to prove they can successfully repay the loan. Lite doc commercial loans are for borrowers that don’t make the full doc criteria but can provide documents such as interim financials and rental income to repay the loan. Low doc commercial loans are for borrowers that cannot provide any of the above traditional documents but can obtain an accountants letter confirming they can repay the loan. A no doc commercial loan is also known as an asset lend where the borrower has no documentation to repay the loan making the loan an asset lend against the property.
When deciding on a commercial loan broker to facilitate your commercial loan it is helpful to look out for a few key services which will make your process as smooth as possible. Fast turnaround times and tailor made solutions can be extremely beneficial if you require your commercial loan to be approved in a timely and specific manner. If you don’t meet any of the high documentation levels required to prove you can repay the commercial loan, an organization that has access to non bank private lenders with a commercial view on commercial loans would be most appropriate.
If you require some wriggle room within your commercial loan then an organization that caters for commercial loans with flexible servicing criteria, terms and conditions, and LVR’s would be advantageous for your situation. If money is tight and you require your commercial loan to be based on the valuation of the property as opposed to the purchase price a commercial loan facilitator with access to this as well as commercial loans with no annual reviews would suit your needs.
Ultimately, when deciding on a commercial loan broker it is essential to find the people and organization that you feel comfortable with and that suits you and your commercial loan needs best.
By Unsplash from Pixabay