What is commercial finance and how is it different to residential finance.

Loosely they are both the same, both require real estate security, however commercial funding can be an interesting exercise.

Funding for Commercial properties can be based around key items such as the security being offered, the tenant and the lease term and the need to look very closely at who is the borrower.

Terms are generally 15 years and lending ratios tend to be lower than residetial loans with the general lending ratio at 70% of the property value.

Most people who enter into the commercial market are classified as ‘sophisticated borrowers’ or ‘high net worth individuals’.

This is because commercial funding requires you to understand the demands of  commercial securities and the need to have greater equity contributions.

Each and every commercial loan written is different. You may be purchasing a strata office building with many tenancies where these are short term and some are long leases. With this you may want to gear your term to the length of the tenancies to ensure your debt is cleared by the end of the lease term.

Any way you look at commercial finance, you need to talk with someone who can listen to your requirements and who can help you achieve your goals.

At  Edge Financial Services we have the right people to assist you.

Please call us now on 02 8920 0934. Or speak to our commercial loan Director Glenn Pomroy on 0407 753134.