Commercial Loan for a Shopfront
Looking to expand your business and purchase a shopfront? Mortgage Providers can help!
What can I borrow?
- If you are purchasing a shopfront commercial property most banks will allow you to borrow up to 80% of the property’s value, or 100% if you add a guarantor to the loan.
- Some lenders may put limitations in place if you are purchasing the property and also intend to operate your own business from the shop.
- Many lenders also offer low doc commercial and no doc options.
Am I eligible?
- Banks will want to see that you have at least 2 years’ relevant industry experience.
- A business plan that forecast’s the business’s cash flow, how the location will contribute to the business’s success, as well as in depth research into any potential completion.
- Banks will also want to see what businesses the other tenants within the area are running and whether it is in direct completion of your shop.
How is the business valued?
Banks will take the approach of valuing the property, any current tenants operating a business out of the property or both; depending on your purpose for purchasing the shopfront.
Lenders will take into account:
If you are buying a property, lenders will consider its size and whether it’s sufficient enough to operate a business from.
The location of the shop and the demographic of the current tenants nearby will be assessed.
The zoning the property certainly influences the way a lender will value the property.
- If tenants will be running a business from the shop, the lender will want to see their last 2 years’ financials. They will use this information to assess the likely success of the business.
- If you are buying the property to operate a business in, you will need to show your experience in that field along with a detailed business plan as mentioned above.
- Where you are buying the property freehold, you will need to show how you will be servicing the loan, so you will need evidence of your income through your last 2 years’ tax returns and notice of Assessments.
If you wold like more information about applying for loan for a shopfront, call us on 1300 656 600 or enquire online and we will be in touch with you.