By Zuko Komisa
What you need to know about securing financing for commercial property.
Many small businesses can attest to the fact that securing financing for commercial property is not as easy as going to your bank and asking for a loan.
The process may be intimidating, especially if you are unfamiliar with the procedures involved.
Keep in mind that when you apply for a loan, the majority of financial institutions will want you to put down a set amount of the loan as a deposit.
The deposit amount will vary depending on the type of business, it’s financial standing, and any additional variables the institution may take into account.
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Kaya Biz with Gugulethu Mfuphi spoke to Shane Padayachy – Area Manager at Business Partners Limited about what you need to know about securing financing for commercial property.
LISTEN TO THE FULL CONVERSATION HERE:
“There are several advantages of owning a business property, it is a long-term investment, and in the long-term, your rental goes up to way more than your bond repayment would be initially. It is a bit of a bullet to a bit in the early stages. However, you avoid rental escalation in the long-term. says Padayachy
“When we look at funding for a commercial property we look at two types of investments. One is an owner-occupier, where you have a business that wants to occupy the premises, or two, it could be for investment purposes, where you want to own the property to generate income.” says Padayachy
What is looked at before receiving financing
“When we look at financing the business we place reliance on three factors, we look at the state of the business, the market it operates in, as well as the financial affordability. We would look at the profits the business generates, vs the instalments to purchase the property, we also look at the entrepreneur’s experience and their involvement in the business.” says Padayachy
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