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Commercial

Construction Loans

Looking to get a commercial construction loan?

At Chardon, we take a personal approach to helping you get your commercial construction loan approved.

*Information provided is for assessment purposes only and no enquiry is made on your credit file.

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*Book in a No-Obligation meeting with one of our brokers to see if you can get approved for a loan.

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Commercial Construction Loans

Looking to get a loan for a commercial construction project?

At Chardon, we take a personal approach to helping you get your commercial construction loan approved from our range of specialist lenders.

We're Here to Help

Getting a construction loan can be a complex process. Let us help!

Get Approved

We are experts at finding lenders that will approve construction loans.

Multiple Options

We have a vast network of lenders that will offer

construction loans.

What is a construction loan/development finance?

A construction loan or property development finance is a loan that can help you fund construction of more than one property on one title. A commercial development loan is very similar to a residential construction loan except banks are a little tighter with the Loan to Value Ratio (LVR).

They fall into 2 categories:

  • Residential - Most banks and lenders define residential property development as smaller-scale development, often up to four different units. This kind of mortgage can have standard fees and charges and is the less risky of the two. 

  • Commercial - If your property development is greater than four or five residential units, banks and lenders are likely to characterise it as commercial property development. This can be anything from a skyscraper to a series of commercial properties. These kinds of mortgage applications can be more complex, and often attract a higher interest rate to protect the bank or lender against risk.

Why speak with a specialist commercial construction loan broker?

Due to the complexities and paperwork involved with applying for a commercial construction loan, it is recommended you work with a qualified broker to help you gather all the required documentation and financials so you can ensure that when you apply for the loan you don't miss anything and by working with a broker, they can help you cross-check everything is in order and that you are eligible for the commercial construction loan.

Need help with applying for a commercial construction loan?

The team at Chardon Commercial Lending can help you with the entire process and even negotiate and find the best deal from our network of lenders.

What can I use for commercial construction loan security?

For commercial construction loans you will need collateral to put up against borrowing for a commercial construction loan.

Types of security include:

  • Registered mortgage over the property being developed.

  • General Security Agreement (GSA) over all of your rights and undertaking in relation to all security property, including pre-sale deposits.

  • Directors’/shareholders’ guarantee.

  • Rights to designs and intellectual property (an architect can help with this).

Does it matter what type of commercial property I want to build?

No matter whether you’re looking to build a block of residential units, a warehouse, a pub or a hotel, a specialist valuation is required to review your plans.

You’ll need to have DA approvals from the council so the bank isn’t approving a commercial development loan for a child care centre in a location zoned industrial, for instance.

In most cases, you’ll be able to borrow up to 50-60% of the property value but it really depends on whether the property is considered a standard property or specialist property.

The development of specialised properties like service stations and pubs may be considered more favourably if there’s a genuine need for the service such as in a new suburb.

The location and its population may support the property that you want to develop and this will help attract business tenants who want to lease the premises for their business.

What if I just want to renovate or do a shop fit-out?

If you’re simply looking to get a loan for a shop fit-out or renovation, then,  know that there are a few lenders that do offer renovation loans but getting a great deal comes down to choosing the right lender. Contact us if you are looking to renovate or do a fit-out.

How can we help?

With Chardon, we take a personalised approach to help you get your commercial construction  loan approved from our network of specialist lenders.

  1. Book a meeting with one of our brokers

  2. Provide us with some information about your financial situation

  3. We find lenders that offer a suitable loan solution

  4. Submit your loan application

  5. Get Approved!

Eligibility and approval is subject to standard credit assessment criteria.

For more information please download our credit guide.

 
 
 
 
 
 
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Business Loans FAQ

Read through our knowledge base to find answers on how to get a business loan.

Eligibility and approval is subject to standard credit assessment criteria. For more information please refer to our credit guide.

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How can I get a business loan?

This is a very broad question. The best way to begin is to look at your reasons for getting a business loan, the amount you need and if you can afford to repay it. The first questions a potential lender will ask are ‘What do you need the money for?’ and ‘How much money do you need?’ Once you have answered these questions, you can approach potential lenders.

A wide range of business loans is available and the right one for you will depend on your circumstances. For example, if you don’t have assets to pledge as collateral, you will need to get a business loan that is unsecured. If you have collateral (residential or commercial property or business assets), you will be able to get a business loan that is secured. The difference between the two types of loans is that you can borrow more for a lower interest rate when your loan is secured.

The type of loan can depend on what you plan to use the money for. Equipment finance and hire purchase, for example, are specialised types of business finance used to purchase equipment. If you are seeking short-term funding for cash flow, a business overdraft, line of credit or an unsecured business loan could be the right loan for your needs.

Which bank or lender is best to get a business loan from?

Many banks offer a range of business loans, so it’s impossible to say which bank is best for a business loan. For a traditional bank loan, the bank will require you to complete a large amount of paperwork. For a new business, the bank will also require a business plan, including profit and loss projections. Even though banks differ somewhat in their approaches, they tend to offer the same range of financial products. These include short-term and long-term loans, loans with fixed rates and variable rates, secured and unsecured business loans, business overdrafts, lines of credit, credit cards and equipment finance.

Besides the banks, there are many non-bank lenders that specialise in small business loans. They offer a wide range of finance options to meet the needs of businesses in various financial situations.

Fintech (financial technology) lenders are non-bank lenders that leverage technology to make it easier when applying for a business loan. Using leading-edge technology makes it possible for you to quickly and safely apply for a business loan online. 

Is it difficult to get a business loan?

This will depend on your financial situation, how long you have been in business, whether you have collateral and the type of business finance you choose. For example, for a typical SME, it’s very hard to get a traditional bank loan. You have to submit a large amount of paperwork and often wait six to eight weeks for approval. In fact, a survey of small to medium enterprises showed that banks reject around 75% of their loan applications. This high rejection rate is the result of regulatory restrictions which limit the level of risk banks can take on.

Non-bank lenders, including fintech companies, are not constrained by banking regulations, so they are able to make more loans to small businesses. Since the loans they make are unsecured, the interest rates are higher than those of traditional bank loans. As noted, the innovative technology they use simplifies the lending process. Once it has been determined that you can repay the loan, and you are approved, the funds are transferred into your account. In this situation, it’s not hard to get business finance if you meet the criteria of the non-bank lender.

How can I get a business loan without security?

You can get a business loan without security. When you don’t use security it’s called an ‘unsecured’ loan. Even if you don’t have security, there are many loan options available. The main difference is that you usually won’t be able to borrow as much and you will pay a higher interest rate. For example, a typical rate for a secured business overdraft is around 8% per year, while the rate for an unsecured business overdraft is around 12%. That’s 50% more interest for the unsecured loan.

Certain types of loans don’t require existing collateral but use what you are purchasing as collateral. For example, with equipment finance, the item you are purchasing acts as the collateral while you are repaying the loan.

Non-bank lenders provide unsecured loans, so don’t require collateral. They safely and securely analyse your finances and credit information online to determine if you are approved for a loan and the loan amount.

Can I get a business loan if I am credit-impaired (bad credit)?

This depends on what you mean by ‘credit-impaired' or 'bad credit'. If you don’t have a credit record at all, it can be challenging to get a business loan. The same is true if you have a bad credit history which can be a result of late payments, defaults and/or bankruptcy.

If you have no credit record, it’s recommended you start somewhere. This could be getting a personal credit card with a low limit and making sure that you make all the payments on time. This way you will build a positive credit record for when you want to take out larger personal or business loans.

If you have bad credit, it can be challenging to get business finance. Some non-bank lenders specialise in providing business loans to people with bad credit but will charge a higher interest rate due to the higher risk.

To get a clear picture of where you stand, you can get a copy of your FREE credit report from:

How is your interest rate better than a bank?

Simple.

If you walk into a bank, you might get a good product. But the selection is limited because they can only provide their own products.

 

With a business loan broker, we are talking to all the banks and lenders. In many cases we will have lenders on our panel that you may not have heard of that might be the lender that offers you the best deal.

Can I pay off my business loan early?

With most business loans, there is an option to pay off the loan early. With some lenders, you will pay the interest for the full term even if you pay the loan off early.  Other lenders will charge full interest minus a small discount when the loan is paid off early. 

Is my business eligible to get business finance?

This will depend on a number of factors including your financial position, credit history and ability to make repayments. Business lenders will typically look at your cash flow, profit and loss statement and balance sheet. In addition, they will check your credit history to see what other debts you have and how reliable you have been in making payments. Some lenders will require collateral to get a business loan, while others offer unsecured business loans that don’t require collateral. Some lenders have minimum eligibility criteria before they will consider lending. 

What are early exit fees?

With most business loans you may need to pay a fee if you decide that you would like to repay the loan before the term ends. This rate can vary between different lenders.

What do I need to complete a business loan application?

It depends!

Firstly, on your personal circumstances. Secondly, on the type of transaction. And finally, it can depend on which lender you are using.

As a rule of thumb, be prepared to hand over items such as:

 

  • ID

  • Payslips

  • Tax Returns

  • ATO Notice of Assessment

  • Income Statement

  • Bank Statements

  • BAS

  • Rates Notice

  • Accountant’s Letter

 

The above list is not extensive, but depending on your circumstances, transaction type and bank, you may not need to supply all of these.

 

Further to this, your broker will need to capture all of your personal information such as your employment history, assets, liabilities, income and product needs and your business objectives.