Finance & Investment, Commercial property loans offer greater amount at lower rate


by GRACY BONSU - Date: 2008-08-01 - Word Count: 516 Share This!

Loans against property can be broadly divided under two head. They are loans against residential property and and loans against commercial property. Both these loans offer an amount based on the equity value of the pledged property. The real estate market of the UK is going through the slow turn. The price of residential realty has decreased by 12% in last six months and more depreciation in the value is on cards. This is due to the squeezed credit, global credit crunch and unavailability of home loans. As the value of the residential properties are declining, you can not avail a higher amount of cash (as it was earlier) by pledging the residential property as security. In such scenario, if you have commercial property, you are the luckiest one.

Commercial property, according to the definitions of real estate are the immovable assets only meant for business, industry or office space purpose. No residence aspect is concerned with these properties. residence aspect may be there(in case of hotels) but the purpose is is purely the business residence. The buy-to let properties also do not come under the preview of commercial properties. Their value as on an average four times higher than the value of the residential property. So by pledging commercial property you can avail a significant loan amount for the needs of your business.

Commercial Property loans assist all businesses from start ups to well-established firms by offering a higher loan amount. The UK loan market offers loans for all types of commercial, semi-commercial property and owner occupier commercial property. These loans can be borrowed without proof of income or accounts (Self-Certification). In case of loans against residential property, the loan applicant can Borrow up to 85% of property value. But in case of Commercial Property loans, the loan applicant can borrow 100% or more on his commercial property without any additional security. This is only due to the higher value of the commercial properties.

Commercial property loans are of three types. The structured business finance under these loans are secured against a wide range of assets such as invoice discounting, debtor financing. The semi commercial property loans are the low rate loans for Self cert semi commercial owner occupier property such as guest houses, small hotels, cattery, kennel, equestrian business with owners accommodation facility. Self Cert Bridging finance available under these loans are arranged for property investors. In these loans, no accounts required and up to 85% loan to value for closed bridging and 100% of purchase price. The loan applicant can avail these three types through the online mode.

The amount borrowed under commercial property loans can be invested to purchase commercial property for investment purposes and for the property you are looking to fund is office, retail, warehouse or industrial premises for the purpose of letting under formal tenancy agreements. They are approved at a comparatively lower rate and the repayment period is generally longer. The online loan application makes the loan approval fast and hassle free.

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Related Tags: commercial loans, commercial loan company, commercial loan refinancing

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