If you're looking for financial support, your commercial real estate might hold considerable value as collateral. You can utilize it to secure a loan specifically for commercial property. Curious to learn more about this credit option? Read on!
Understanding Commercial Property Loans
A commercial property loan affords you the opportunity to leverage real estate you already possess as collateral for financing. This financial product can provide the necessary capital for expanding your business or acquiring new equipment.
Generally, you can secure a loan covering approximately 60-70% of your property's market value. Furthermore, this funding comes with attractive interest rates and no limitations on how you can use the funds. Notably, the application process is typically quick and straightforward. Several lenders even provide customized loan solutions to suit the specific needs of various businesses.
Commercial Property Loan Qualification Criteria
A particular financial product is accessible for independent contractors falling into these categories:
Types and Examples
Independent Professionals: Chartered accountants, architects, company secretaries, lawyers, medical professionals, and consultants.
Non-professional Self-Employed (SENP): Traders, manufacturers, commission agents, contractors, and others.
The criteria for qualifying for a loan against commercial properties can differ between lenders. However, the typical requirements often include the following:
Residency: Must be Indian.
Age: At least 25 years and a maximum of 75 years at loan maturity.
Income: Some lenders provide funding based on the business's financial viability without requiring proof of income. Nevertheless, the applicant needs to demonstrate a consistent income through relevant documentation.
Before applying for the loan, both you and your co-applicant (if applicable) should ensure you meet these standards.
Documentation Needed for a Commercial Property Loan
Much like the eligibility criteria, required documentation can vary from lender to lender. Therefore, it's wise to keep these documents in mind before beginning the application process:
- Identity and Address Verification: Options include a passport, Aadhaar card, voter ID, PAN card, driver’s license, or any other valid government-issued identification.
- Income Proof: This could encompass bank account statements (both savings and current), income tax return (ITR) copies certified by a chartered accountant (CA), personal and business income computations, as well as the last three years’ balance sheets and profit and loss statements.
- Property Documentation: Collect all pertinent documents related to your commercial asset, such as buyer agreements, title deeds, historical ownership records (in the case of resale), and any other relevant materials.
- Additional important documents may consist of passport-sized photographs of applicants and co-applicants, checks for processing fees through the lender, business profiles, partnership deeds, etc.
Steps for Applying for a Commercial Property Loan
You can apply for a commercial property loan either online or offline. Here’s how to do it online:
Step 1: Navigate to the website of your chosen lender.
Step 2: Go to the loan applicant section.
Step 3: Fill in the information as requested.
Step 4: Submit your application.
For an offline application, visit your bank or an agent. After completing the application process, a representative from your chosen lender will reach out to you regarding your application and its approval.
Concluding Thoughts
Utilizing a commercial property loan can greatly enhance your credit potential while addressing your business's financial requirements.