25 Year Commercial Loans

Loan Contract over 25 Years

Commercial loans with 25 year loan terms are available in Australia from several financial institutions. It comes as a surprise to a borrower when they realise that the traditional 15 year commercial loan term can actually be higher and therefore there is no need to change the commercial loan.

Lenders who offer 25 year commercial loans?

There are approximately 8 different 25 year commercial loan lenders in Australia. These lenders range from either banks, credit unions, building societies, mortgage managers, and finance companies.

Do any of the major banks offer commercial loans with 25 year loan terms?

In 2013, none of the big four banks offer commercial loans with 25 year loan terms. Rather, these loans are found with smaller regional banks and credit unions.

Loan types available with a commercial loan over 25 years?

With a 25 year commercial loan you could take out any of the following loans:

  1. Variable loan
  2. Interest only loan
  3. Fixed loan
  4. Line of credit
  5. Overdraft

Further, these commercial loan types can be combined so you could take out a combination of different products depending on what your needs are.

What is the benefit of a 25 year commercial loan?

The prime benefit of a 25 year commercial loan is the term of the loan. By having your loan spread out over 25 years it gives you more time to pay it off, and also reduces your monthly payments. Hence it is a cheaper monthly repayment option when you take a commercial mortgage for 25 years.

Borrowing capacity using a 25 year commercial loan?

With a 25 year commercial loan your borrowing capacity is higher. As the loan term is spread out over a longer term, the over cash flow position allows you to borrow more. When you compare the borrowing capacity of a 25 year commercial loan compared to a 15 year commercial loan, you will find the difference as per the table below.

Type Of Lender 15 Year Commercial Loan Lender 25 Year Commercial Loan Lender
Income Per Annum $110,000 $110,000
Rental Income $75,000 $75,000
Marital Status Single With No Kids Single With NO Kids
Other Monthly Liabilities General Living Expenses General Living Expense
Interest rate 7.1% 7.1%
Borrowing Capacity $1,405,000 $1,709,000

 

Do 25 year commercial loans require annual reviews?

Most 25 year commercial loan lenders do not require annual reviews. This is great for borrowers who do not like it when a lender asks for the annual financials of the borrower’s business. Hence, most of the loans for 25 years secured by commercial property are ‘set and forget’ with no annual reviews.

25 year Commercial Loans using low doc policy?

It is possible to get a 25 year commercial low doc loan from a small number of lenders. These lenders can be both banks and non bank lenders who provide low doc commercial loans at 25 year terms. Further, these loans have a maximum borrowing loan ceiling amount to $2,500,000.

Types of borrowers for a 25 year commercial loan?

There are a few different borrowing names one can use for a 25 year commercial loan. These include borrowing in:

  1. Personal name
  2. Company name
  3. Trust name
  4. Partnership name
  5. Business name

At Mortgage Providers we have access to a panel of different lenders offering various forms of 25 year commercial loans. We know how to package these loans to suit your requirements when you enquire with us.