A commercial loan is backed by a commercial property such as a retail shop, an office building, or an industrial warehouse.

Documentation Needed for a Commercial Loan

You will need the following documents to secure a commercial loan.

• A copy of the Lease Agreement between you and the leasing company. This lease agreement should state the commercial rent excluding GST. Leasing dates, Right to renewal, etc.
• Commercial Property Sale and Purchase Agreement

How Much Can I Borrow with a Commercial Loan?

Banks often lend up to 60% of the property’s worth or the acquisition price on a commercial property. Also, you can obtain an additional loan for your commercial property by offering your home or investment property to the bank as collateral. Banks typically lend up to 80% of the value of the residence used as collateral.

Repayment Terms for a Commercial Loan

The typical repayment period for a commercial loan is between 10 and 15 years. For example, if you borrowed money for your business and used a residential property as collateral, the cash secured against the house would be repaid over 30 years.

Commercial loan interest rates are typically higher than standard home loan rates.