Commercial Property Finance
Commercial Property Finance covers a wide spectrum of property types and finance facilities.
There is a seemingly endless range of confusing options available when all the factors are considered.
Our role is to find the best match for each client's specific needs at the time of application.
Our Lending Panel
AFNCF has a broad - based lending panel ranging from the major banks, second tier banks, specialist property lenders and private funding.
Minimum Loan size ranges from $250,000 to north of $100 million.
Interest Rates vary with the lender and their "appetite" for the transaction being considered. Commercial finance rates are traditionally priced off the lenders cost of funds or BBSY plus a margin-that depends on the lenders perception of the relative transaction risk. Risk margin may be up to 7% (or higher).
Assessment Rate - normally 3% per annum over proposed interest rate - to assess your capacity to service the proposed debt under stress conditions.
Maximum Loan to Valuation Ratio - Traditionally the maximum Loan to Valuation Ratio (LVR) for stand -alone commercial property secured loans has been in the range of 60% - 80%. For specialised securities the maximum LVR has traditionally been lower than for standard commercial buildings such as office / retail etc. However, some lenders will offer higher LVRS for some assets such as childcare centres, hotels, motels, service stations and shopping centres. Others will lend up to 100% LVR against owner occupied buildings, or for short term - low LVR loans and / or high-net-worth clients they may offer interest capitalisation etc.
Nominal Term - traditionally the nominal term offered by banks has been 15 years - however, competitive forces have driven this out to 30 years in some cases.
Structure of facilities: Similarly, a range options - subject to the individual lender ranging from bill facilities, term loan on a principal & interest basis, interest only, line of credit, Overdraft etc.
Credit Criteria - every lender has their own credit requirements - approval is at the lender's discretion.
Timeframes:
Approval & settlement times will depend on the lender, and the complexity of the transaction - some can settle large transactions in a week or less. Timeframes will also depend on your readiness, your adviser's availability, and the time of year.
- Approval in principle: allow up to 1 week
- Valuation: frequently more than 1 week for inspection and reporting
- Documentation & settlement: up to 4 weeks for refinance transactions
Costs associated with commercial property finance are considerably higher than residential lending.
AFN will provide an estimate of costs and approximate timeframes before submitting an application on your behalf.
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Commercial property finance requires careful structuring and clear lender communication. AFN ensures your transaction is managed professionally from start to settlement.