Quick Facts about Commercial Property Loan (1)

Quick Facts about Commercial Property Loan
Whether it is a shopping center, an office building, an apartment complex, an industrial
warehouse, IT spaces, branded retail outlets or even multiplexes there are reasons why people
would require a loan. In the banking sector which is full of various payment methods, there are
many different types of financing options that people may avail.
However, a commercial property loan is one of the popular methods by which people can have
these buildings constructed. One of the first things that a person needs to ensure is whether
they qualify for the particular loan or not. Very often, many of the banks and financial
institutions require several years of tax returns. Commercial real estate loans for eating joints or
restaurants are often far more challenging than those for retail buildings or office spaces.
Also known as a loan against commercial property these financial options use the commercial
property as the form of security of repayment. Thus they are extremely similar to 'loans against
property' and share similar characteristics. They are also secure loans where collateral is
involved. There are two different types of interest that are involved. They may either be fixed
rates or floating rates.
When compared to a Property Loan, the interest rates are higher. Therefore it is very important
to calculate the re-payment capacity of the person before availing it. There is a large amount of
documentation that is required which is very tedious. Some of the different documents that are
required include balance sheets, income statements, statements of cash flow, income
statements and profit and loss statements are required. Besides this, a person is required to
submit personal legal documents so as to evaluate his/her background. The sanctioning of such
loans often takes several weeks to occur.
There are many benefits of commercial property loans. Some of the key ones include:
There is flexible repayment tenure: They are especially popular for its flexible repayment
options. A person can expect a tenure ranging anywhere from 3 years to a maximum of 15
years.
There is a higher loan amount approval: The main purpose behind these loans is to support
business expansion. Ideal loan providers are known to offer up to 75 % of the registered
property value.

These loans have a Balance transfer advantage: If a person wants to transfer their loans from
one lender to another, they can do so. Once the person has completed the transfer, the new
property loan will attract the lending rates of the current property finance provider. Besides
this, a person will also get the benefit of having a rise in the loan amount which is offered by the
current provider.
There is simple EMI's which are involved: This method of availing financial solutions is attractive
because of the simple equal monthly installments (EMI) that are involved. This lowers a person's
burden of their repayment and also gives them a lot more time to focus on their different
business development strategies.
[Source: http://www.sooperarticles.com/finance-articles/loans-articles/quick-facts-aboutcommercial-property-loan-1308760.html]