Navigating Commercial Loans: A Guide to Success

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Applying for a commercial loan is quite different from securing a home loan. To help you navigate this process, we’ve outlined a clear path to keep you on track.

1. Work with a Specialist Broker

Commercial lending is more complex than residential lending, so it’s crucial to work with a broker who understands and has well established connections inn commercial and finance. At Indigo Finance, we’re not just mortgage brokers—we’re Lending Experts with extensive experience in the commercial sector.

By working with us, you gain access to a wide range of lenders, giving you the best chance of finding a tailored solution to meet your specific needs. Our comprehensive understanding of the market ensures that you receive expert guidance every step of the way.

2. Prepare Your Paperwork

Commercial loans require a more thorough assessment than residential loans, and the documentation needed can vary depending on your individual circumstances. Lenders often assess each application on a case-by-case basis and assessment can vary depending buying for your business to occupy or for investment.

We know what lenders are looking for and there are often a few different approches we can take to ensure a smooth and stress free approval that allows the lender to fully understand and feel comfortable with the business they’re funding.

3. Assess Your Financial Position

Loan-to-Value Ratios (LVRs) for commercial loans are typically lower than those for residential loans. While home loans might offer up to 95% with Lender’s Mortgage Insurance (LMI), commercial loans typically range from 50% to 80%, depending on the deal and the type of security. This means you’ll need additional funds or equity to contribute.

Having good cash flow and a buffer is important as commercial loans often in shorter terms to secure the best rates. At Indigo Finance, we ensure you’re fully prepared and positioned to secure the best terms possible.

4. Key Considerations

When applying for a commercial loan, it’s important to negotiate terms and features that suit your specific situation. We’ll work closely with you to ensure the loan terms align with your long-term goals.

Ideally, you want a loan that doesn’t require ongoing reviews and offers a longer loan term. Some lenders may present a more competitive rate with a shorter, three-year term, but this often means renegotiating your rate and fees when the term ends, potentially costing you more in application and establishment fees. We help you avoid these pitfalls by securing terms that minimise additional expenses.

If you’re considering a commercial loan, get in touch with us today.

As Lending Experts, we’ll guide you through the process to find the best solution for you and/or your business.