Commercial loans are typically divided into three categories.
The first category is commercial property loans. For these loans, the loan amount from most lenders is generally from 65% – 80% of the commercial property value. The purpose of a commercial property loan is for the initial purchase, refinance or cash out of commercial properties. The interest rates for commercial property loans are typically lower than other commercial loans.
The second category is business loans. Business loans are divided into secured and unsecured categories. A secured business loan, as its name suggests, is secured by the property. The loan amount must be for the purpose of purchasing or operating the business. The loan amount can be up to 100% of the value of the security, subject to conditions from separate lenders. Unsecured business loans are mainly based on business goodwill for capital loans. Common examples are franchise business loans, post offices, convenience stores etc.
The third category is development loans. General development loans refer to loans for the development of three or more new construction on one or more titles. The loan amount is typically based on the estimated value of 65% of the completed project after development or 70% of the overall development costs. Different banks will have different requirements for this. The bank’s approval for development loans is mainly based on the calculation of the effective pre-sale amount, any relevant developing experience, the feasibility of the project, the qualification and experience of the builder and so on. We can not only provide developer construction loans from mainstream banks to developers, but we can also provide developer loans from private equity funds as an alternative solution. For further details, please contact our loan manager for a more specific breakdown.