Modern Australian
Men's Weekly

.

Learn How Commercial Real Estate Loans Work

  • Written by News Company


If you’re looking to expand your business you’ll need a conventional loan, unless that expansion involves building or moving to new premises that you’re going to need to buy. You can also need a commercial real estate loan if you’re planning on starting a business and want to purchase your own premises.

Of course, purchasing premises is the more expensive option but, it's also the better option in the long term. It’s worth noting that in order to apply for a commercial real estate loan you need to be looking at income-producing property.

In fact, there are 2 main types of commercial loan, it’s a good idea to speak to a corporate finance specialist before committing to a specific option.

  1. Traditional

This type of commercial loan works in a very similar way to a traditional mortgage. The building is valued and this is compared to the number of funds you need to borrow, there will almost always be a down payment required. Your business income will then be assessed to establish if the business can afford the repayments

The building being purchased will be used as collateral, it’s also possible the lender will ask for a personal guarantee as well. This decreases the risk for them.

It is also possible to get a bridging loan to help stretch your finances when moving between premises as this usually requires the new premises to be bought before the old ones are sold.

  1. Construction Loan

If you’re planning on constructing your own business premises then you’ll need a specialist commercial construction loan. Again, the income of the business will be taken into consideration as will the final value of the finished building.

Funds are usually released in stages and you’ll need to repay them as soon as the building is finished, which means you’ll need a traditional commercial real estate loan.

Applying For A Loan

If you’ve decided that this is the route for you then you need to be aware of the usual commercial criteria:

Borrowing Limits

Commercial lending is tighter than residential, you’re not likely to get more than 80% of the value of your commercial premises. That means you need a reasonable deposit.

It’s worth noting that if the property is high value you’ll probably only get 70% finance.

No Insurance

In commercial lending, there is no such thing as lenders insurance to safeguard you if it all goes wrong. It’s important to be aware of this before you start the application process.

Loan Period

Most firms will offer between 15-20 year repayment terms. However, if you need a really large loan, such as over $1 million, you’ll probably find all the interest has to be paid within the first three years and there will be a shorter timescale for the overall payment.

Charges

The interest rates vary according to the stability of your business, how long you’ve been trading, what your business is trading and even the nature of the economy. That’s a lot more variables which makes it difficult to know what rate you’ll get in advance.

Don’t forget that you will also be subject to regular reviews to ensure your business can continue to afford the repayments. There may also be additional charges along the way.

That’s why you don’t just need to know how commercial real estate loans work, you also need to read all the small print before signing up.

Business

Beyond Clicks and Likes: Why Many Small Businesses in Australia Still Aren’t Leveraging Digital Marketing in 2025

Introduction In 2025, online marketing has become the driving force behind business growth for companies of all sizes. Yet, despite its proven effectiveness, a surprising number of small businesses in Australia...

Eco-smart Car Removal in Sydney: Practical Steps That Cut Waste and Return Value

Sydney’s ageing cars add up to a serious waste stream, and choosing the right removal service makes a measurable difference. Your decision sends metal, glass, tyres, fluids, and batteries down...

Measuring the Success of Your Bus Advertising Campaign

Bus ads turn everyday travel into high-reach media. They move through busy corridors, sit in traffic where people can read them, and keep working after the office lights go out...

Powering Shepparton’s Businesses: Expert Commercial Electrical Services You Can Count On

When it comes to running a successful business, having reliable, compliant, and efficient electrical systems is non-negotiable. From small retail outlets to large-scale industrial operations, every commercial facility depends on...

The Smart Way to Grow Online: SEO Management Sydney Businesses Can Rely On

If you’re a Sydney-based business owner, you already know the digital space is crowded. But with the right strategy, you don’t need to shout the loudest — you just need...

Building a Governance Model for Headless Content Management at Scale

Image by pch.vector on Freepik There's never been a better time to implement a headless content management system (CMS) to gain the flexibility and scalability necessary for developing digital experiences...

Reinventing Research: How E-Libraries Are Changing Education Forever

A New Chapter for Learning For centuries libraries stood as temples of knowledge filled with shelves that smelled of dust and paper. Today the same...

Psychologists Explore Gestalt Vs Schema Therapy for PTSD Treatment

Recent research has revealed that in 2022, 1 in 9 Australians experienced post-traumatic stress disorder (PTSD). For some, this can significantly im...

Beyond Sunscreen: Building a Sun-Smart Culture in Modern Australia

Australia’s sun-soaked lifestyle is a defining part of its national identity. From beaches and sports fields to weekend barbecues and bushwalks, t...

What is Power BI & Why Should Your Business Use It?

In today's data-driven world, businesses are constantly searching for ways to gain a competitive edge. One tool that has emerged as a game-changer i...

From Service to Strength: How Aussie Veterans Are Rebuilding Their Lives with Everyday Support

Life after military service can bring new challenges. From physical limitations to mental health hurdles, many Australian veterans find everyday hou...

The Best Times of Year to Buy a Caravan

If you're shopping for caravans for sale, timing matters almost as much as the layout and features you desire. The calendar shapes price, stock and ...

The Growing Demand for Smart Living Through Home Automation

Technology has reshaped how we communicate, work, and travel—but now, it’s also changing the way we live at home. The rise of home automation i...

Beyond Clicks and Likes: Why Many Small Businesses in Australia Still Aren’t Leveraging Digital Marketing in 2025

Introduction In 2025, online marketing has become the driving force behind business growth for companies of all sizes. Yet, despite its proven effect...

Lighting Shop Perth: Your Comprehensive Guide to Choosing the Right Lighting Solutions

Lighting is a fundamental element in defining the ambiance, functionality, and aesthetic appeal of any space. Whether you are renovating your home, ...

Private Booze Cruisers – The New Must-Have Toy for Cashed Up Millennials

Did you hear that your 30s are the new 20s? We’ve finally rocked up that adult money and now it’s time to play with it. I was going for a walk ...

Grinding & Jaw Soreness: Signs You Might Need Night Guards and How We Protect Enamel

Waking with a tight jaw, tender muscles, or a dull temple headache is more than a bad night’s sleep. Many Australians grind or clench their teeth ...

Circular Interior Design: Furnishing with Salvaged & Reclaimed Materials

Circular interior design is gradually making its way from niche circles into mainstream Australian homes. At its core, this approach revolves around...

Invisible Braces vs Traditional Braces: Which Is Best for Adults?

Straightening teeth as an adult is common in Australia, and the options are better than ever. The two main choices are clear aligners, also called i...

Smoking, Vaping, and Healing: How Nicotine Affects Sockets and What you can do About it

Nicotine and oral surgery are a poor mix. After an wisdom teeth removal in Sydney, your body needs a stable blood clot and steady blood flow to rebu...

Titanium and Bone: How Dental Implants Become Part of the Jaw

Dental implants replace missing teeth by anchoring a metal fixture in the jaw and fitting a crown on top. Their success rests on a biological event ...

Do Wisdom Teeth Really Make You Wiser? Debunking Old Beliefs

Wisdom teeth are among the most discussed teeth in dentistry, not because of their function but because of the myths that surround them. The name it...

How Long Do Dental Implants Really Last? The Facts Dentists Won’t Skip

Australians often ask one simple question before green-lighting treatment: how long will a dental implant actually last? The short answer is that th...

The Confidence Curve: Why Implants Change the Way You Carry Yourself

Losing a tooth is not just a physical change; it alters the way people see themselves and how they believe others perceive them. While dentistry has...