Businesses and small-to-medium commercial enterprises come in so many shapes and sizes, the commercial loans they need to operate have to as well.
You may think commercial mortgages are the same as residential mortgages, but they require specialised knowledge and limits, are usually larger, and come with smaller loan-to-value ratios than housing loans.
Loans in the SME space generally are anywhere up to around the $3 million mark and come with terms of between 15-30 years with LVRs between 60-75 per cent.
With some specialist lenders you can sometimes borrow with an LVR of up to 80 per cent.
Like housing loans, interest rates vary on commercial loans but are higher and start at around 6 per cent.
Commercial mortgages are not as focused on the individual as residential mortgages and instead are more focused on the financial health of the business,
As a result, they need to see financial statements, business banking statements and other details surrounding the SME’s performance.
The complexity and specialist knowledge required for commercial loans means most are taken out in the mortgage broking channel.
There are specialist commercial lenders in the market that help brokers with advice for writing up commercial mortgages and connect them to the necessary decision-makers in the field,
Talk to Perry Finance for your next commercial mortgage move.