3 Tips When Financing Your First Commercial Property Loan – What to Know

Commercial property loans are a vital utility for businesses for income-producing properties. Getting the help of a loan significantly improves the capital capacity of a commercial property business, allowing for a flexible and more profitable thriving business.

The fact that these loans are used to increase profitability already separates them from residential property ones. While the latter is still extremely useful for many people, applying for a commercial loan is reasonable and more efficient since its purpose is to build capital and generate income out of it.

If you’re thinking about getting your first commercial property loan, we have prepared three tips to ensure that you’re getting the most out of it:

1. Choose specialised commercial lenders

The market has various options for commercial property loans and familiarising yourself with all of them may take a while. To give you a better understanding, the well-known types of lenders, which are called mainstream lenders, tend to move buyers of commercial properties to their lending plans automatically. In most cases, this makes the borrower stuck with higher interest rates and less flexibility due to restrictive conditions.

There are also second-tier lenders that specialise in commercial lending. Oftentimes, working with mortgage brokers who have experience and clearer understanding of the commercial lending market will give you access to these types of lenders. Since they are less popular compared to mainstream counterparts, these specialised lenders are more competitive and are better at helping their clients naturally.

2. Apply for shorter loan terms

As with any type of loan, the longer the financing, the higher will be the earnings of the lender. Of course, we’re not saying that it’s a bad thing to charge customers monthly with higher interest rates because that’s how they keep their business alive. However, if you’re looking for the most value, then you’d want to stick with loans that offer lower interest rates.

The only matter that’s stopping many people from applying for such plans is the higher upfront payment and monthly fees. On the bright side, you’re able to keep more of your earnings over a long-term period and use them to grow your property business. If you are capable of higher monthly payments, then it’s optimal to go for the shorter loan terms instead.

3. Highly consider the terms of leasing

Since there are various options for commercial property loans, it comes to no surprise that the lease terms will differ as well. The terms of leasing should be carefully considered as they aren’t standard, and the difference will either make or break your real-estate business.

Be sure to read and fully understand the conditions as dictated by the terms of the loan. This is because some leases provide incentives that can greatly improve upon your loan application. An example of such benefits includes better lengths of leases and more profitable premiums from tenants.


Applying for a commercial property is an excellent move to enhance your equity and the profitability of your business. For first-time loan applicants, however, the process can become complicated, leaving them anxious and worried about their choices. With the tips given above, you can narrow down your options so that you’ll be selecting the best one for you.

Don’t overcomplicate your financing! With Finance Corp, we make it easier for you to acquire the loan you need. If you’re looking to take out a commercial loan in Perth, get in touch with us to see how we can help.