BUSINESS LOANS
A business loan is a lending facility that is used for the purpose of growing or purchasing a business. This could include purchasing assets or providing cash flow for the business. Typically business loans are secured by a guarantee that is supported (secured) by a residential or commercial property.
Another type of business loan facility is equipment finance. An equipment finance facility is used to purchase business equipment with a goods mortgage taken over the purchased asset to secure the facility.
COMMERCIAL LOANS
A Commercial Loan refers to funding provided by lenders for the purpose of buying property such as business premises, shops, factories, purchasing assets used by a business or funds borrowed to invest into a business.
The term of a commercial loan is generally shorter than that given to residential mortgages. A commercial loan secured by a commercial property will have a term that can range up to 15 years. Borrowers can generally obtain up to 70% of the property’s valuation. The loan terms in these cases can be longer when a residential property is used.
Business loans are a type of commercial loan facility and can be secured by both residential or commercial property.
Equipment Finance or Asset Finance is used to purchase business assets. These loans have different structures that include equipment loan, chattel mortgage, commercial hire purchase or finance lease.
A property development loan is another type of commercial loan and is normally used when 2 or more properties are being built simultaneously.
Self-managed super fund holders can also purchase commercial properties using an SMSF loan with similar term to that available to the purchaser of a commercial property.