Commercial Loans
A commercial loan provides businesses with funds needed to grow and operate. A commerical loan is a large, long-term loan from a bank or a financial institution that is typically used to fund major capital expenditures and/or cover operational costs that the company may otherwise be unable to afford.
Commercial Loan Terms
The term of your commercial loan is typically determined by the security that you offer to the bank:
- 30-year term: Available only with residential property as a security.
- 20 – 25-year term: Available from select lenders with commercial property as a security.
- 15-year term: The most common term for commercial property loans.
- 5–7 year term: Typical terms for commercial equipment / equipment finance.
- Shorter terms: Used for short term business loans, invoice discounting and development loans.
The security offered for a commercial loan is a critical factor in determining the loan terms and interest rates. Commercial property is often used as security for these loans, and lenders may also consider other assets of the business as additional security.
The interest rates for commercial loans in Australia can vary depending on the lender, the loan amount, the term of the loan, and the security offered. Fixed and variable interest rate options are available, and businesses can choose the option that best suits their needs.
In addition to the loan itself, commercial borrowers in Australia may also have access to other facilities, such as overdrafts. An overdraft can provide businesses with additional flexibility by allowing them to borrow more money than what may currently be in their account.
When you take out a Commercial Loan, other additional facilities may also be considered such as;
Overdraft
Also known as Working Capital is an extension of credit, where the bank or financial institution allows you to borrow more money than you have in your account
Equipment Finance
Short term loan for the purchase of new equipment or update on capital assets
If you would like more information on Commercial Loans, please contact the team at TFC today!