A guide on Commercial Development Finance

 It is necessary to understand that commercial property finance is not the same as obtaining loan for purchasing a residential property. It is easy to obtain home loan approval. But getting commercial property loans for purchasing your own workspace/office is something that only a handful is aware of. These loans are meant to be invested in business use only like purchasing office complexes, office space, restaurants, hotels, etc. 

Commercial property type

Before applying for such commercial property development finance with any bank or lending institution, you need to first know what commercial property constitutes.  It is rather classified into two segments, namely:

• Retail outlet
• Office space
• Both are further subdivided into:
• Ready-to-use/occupy
• Under construction

Being commercial properties, they are likely to be expensive and overpriced. It is generally businessmen and those eager to avail workspace/office for use that may be interested to purchase them. There are also investors who may be interested to rent out their commercial properties to interested companies/firms. 

Lenders prefer to offer such loans to those eager to establish their own offices. But they can be a bit anxious when giving loans to investors. 

What factors affect commercial property loan approval?

• When applying for commercial property finance, you need to consider certain aspects. It includes preparing documents such as tax returns, address proof, ID proof, income, statement, etc. 
• You are to bear processing fees as specified by your lender. Lenders generally charge one percent of the total amount as processing fees. But you may reduce this fee by availing of different offers. ‘Interest rate’ is another vital aspect to consider. The interest rate charged for commercial property finance generally is much higher, unlike other commonly provided property loans. Several other charges are included such as survey fees, loan application charges, annual fees, overall loan cost, etc. 
• The lenders also focus on the builder’s market goodwill and personal profile. For any under-construction property, the lenders are likely to pay more attention to the builder’s details. This is deemed essential to enable the property to get ready at the time of possession. Obtaining a loan for new commercial property is much easier when