Business Property Loan

Financing of New Industrial / Commercial Properties

Business property loan is granted to business, sole proprietor, partnership and investment companies for the purpose of purchasing of their new commercial or industrial properties and this includes residential property for investment purpose. Commercial properties are categorized into Retail shops, Offices, shop houses and including HDB shop houses.

Industrial properties are categorized into Flatted Factory, B1 / B2 Factory, Ramp up factory, JTC factory and URA factory. You can get a commercial or industrial property loan for business own use or investment use. Companies has to show their financial statements and shareholders’ individual income to qualify for a bank loan.

For buying under investment holding company, directors or shareholders will need to be assessed for Total Debt Servicing Ratio (TDSR). This is where it gets complicated as many business people tend to hold on to multiple properties. Hence the need for debt restructuring becomes important.

Bankgoodrates consultants are experienced to assess your overall debt situation and devise ways to make suggestions to get a better financing solution for your purchase.

Generally, the loan quantum can be up to 80% of the purchase price or valuation whichever is lower as the loan tenure can be up to 30 years.

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Re-Financing of Existing Industrial / Commercial Property Loan

Why Would a Business Refinance a Commercial Mortgage?

Lower Rates

Taking advantage of lower rates is a great way for businesses to save money on the cost of their mortgage. If you have an adjustable rate mortgage on your commercial property and market rates drop, you may want to refinance your current mortgage into a mortgage with a lower rate – which could save you money. But be careful, as refinancing your mortgage will have fees associated with it that may negate much of the savings.

Longer Terms

By lengthening the terms of your mortgage, you may be able to reduce your monthly mortgage payments tremendously. By extending a term from 3 years to 25 years will dramatically reduce monthly payments, and may relieve strain on the small business’s cash-flow.

Interest Servicing loan

One structure of a mortgage is to have smaller monthly payments during the term, and at the end of the term the full remaining amount will be due, leaving the business with a massive payment to make. Rather than get stuck making such payment, many commercial property owners will refinance their mortgage before such balloon payment becomes due.

Cash-Out / Build-Out

If a commercial property’s value is worth much more than the current mortgage balance, the property owner could tap into that equity by getting a cash-out refinance loan. A cash-out loan is especially helpful for commercial real estate owners looking to build-out a property, to help with tenant improvements, or to use for business working capital or investment uses.