Historically Low interest rates on Business and Commercial loan

As you are probably aware, Kien Phan of our company specialises in commercial and business lending.

With interest rates being historically low, many banks have provided us with current special offers that we have never seen before. We have been able to get commercial loan interest rates on par or sometimes lower than home loan interest rates for our clients.

Taking this opportunity to update you with the best offers available on the market currently, as of 1 December 2020, we also recap the key points of a standard commercial and business loan application type that we can assist you with.

***Note: different banks have different assessment policies so the rates below are only an indicative and is subject to approval***

Fully secured commercial loan and business loan

LVR: Typically up to 70% or 80% LVR against the property, depending on loan amount and type of security

• If you run a business and have business lending needs, we can also fund further up to against 100% LVR or more under the SME Guarantee Scheme Phase 2 if you are qualified

Current interest rate:

• Low 3.xx% or under for most banks’ fully secured commercial loan and business loan interest rates should be expected. ***The exception for Lease Doc Commercial Loans, No Doc Commercial Loans and some Lo Doc Commercial Loans, which are explained in their own sections in another post.

• Low 2% is possible depending on your risk rating and LVR. For very strong applications, i.e. very strong income vs debt and lower LVR, I have been able to obtain rates as low as 1.88% for a commercial property for own use purpose.

• SME Guarantee Scheme Phase 2 loan will be priced around 4% to 5%

Acceptable purposes:

• Commercial properties related purposes: refinance, renovation, purchase, construction etc are accepted.

• Business related purposes: most are accepted. For examples: working capital, business expansion, renovation and improvement of business premises, purchasing assets or stock, buying another business, starting a new business.

• Cash out from existing property is accepted but will require an acceptable intended use for the cash out.

• Bank usually require proof to verify the purpose and amount requested. At the very least, the loan purpose and loan amount sought must be reasonable and justifiable in relations to your situation.

Acceptable securities and LVR:

• Commercial properties – typically up to 70% to 80% LVR

- Shop, restaurant and other retail

- Warehouse, Factory and Industrial

- Showroom and Bulky Goods

- Offices

• Residential properties – up to 80% LVR

- Owner occupied or investment residential properties

• Can go up to 100% if qualified for a loan under SME Guarantee Scheme Phase 2

Obviously, every business is different and to ensure that you have the access to the best offers in the market, all the details will matter in the application. So feel free to reach out to us if you have a question on a commercial loan or business loan.

Regards,

Kien Phan.