If you need money, your commercial property could be worth a lot to you as credit. You could use it as security to obtain a loan for commercial real estate. Find out more about this credit by reading this blog.
What is a loan for commercial property?
You can get money by using commercial real estate you already own as security through a financial product called a commercial property loan. It is an option to increase the amount of capital available for business growth or purchase new equipment.
Typically, you can get a loan for up to 60-70% of the value of your property. Additionally, this credit option has enticing interest rates and no restrictions on final use. The application process is fast and hassle-free. To meet the particular requirements of each business, some lenders also offer tailored loan solutions.
Qualification Standards for Commercial Property Loans
There is a financial product available for independent contractors. They fall into the following categories:
| Types | Examples |
| Independent Professionals | Chartered accountants, architects, company secretaries, lawyers, medical professionals, and consultants |
| Non-professional Self-Employed (SENP) | Traders, Manufacturers, Commission Agents, Contactors, etc. |
The requirements for qualifying for a loan against commercial property will differ between loan providers. However, a few of the typical ones are listed below:
| Residency | Indian |
| Age | Minimum 25 years to Maximum 75 years (when the loan matures) |
| Income | Some lenders evaluate the business and fund it without needing proof of income. The applicant must have a reliable source of income; it must demonstrate this by submitting pertinent income documentation. |
As a result, before requesting the loan, you and the co-applicant (if any) must confirm that these conditions are satisfied.
Required Documentation for a Commercial Property Loan
In the same way, the eligibility criteria will vary among lenders, and the documents required to apply for a loan against commercial property will also differ. Before starting the application process, you should note them.
Below is a list of some of the general ones:
- Address and Identity Verification: A passport, Aadhaar card, voter ID, PAN card, driver’s license, or any other government-issued document that meets the criteria for KYC.
- Income Evidence: Account statements for savings and current accounts, copies of ITRs with CA attestations, computations of personal and business income, balance sheets, and P&L statements for the last three years
- Property Records: Copies of all relevant documents about your commercial property, including the buyer agreement, title deeds, prior chain of title (in the event of a resale), and any other relevant documents.
- Other crucial documents include passport-sized photos of the applicants and any co-applicants, checks to pay processing fees to the loan provider, business profiles, partnership deeds, etc.
How to Submit an Application for a Commercial Property Loan
You can apply for a commercial property loan online by following the instructions below:
Step 1: Access the website of your preferred lender.
Step 2: Visit the section for loan applicants.
Step 3: Provide the information as prompted.
Step 4: Apply.
You can apply offline by visiting the bank or agent. Once your application process is complete, a representative from the lender’s end will contact you to process and approve your loan application.
Final Remarks
A commercial property loan can be a great way to build credit and meet your company’s financial needs.