How to Make your Commercial Property Funding Case
Are you new to commercial property investment and looking for a lender? You’ll need the professional expertise of seasoned commercial property brokers – because it involves a lot more legwork than investors would associate with residential property.
According to recent article in SA Property Insider, commercial property finance in South Africa is stil falling through the cracks. http://sapropertyinsider.co.za/2019/11/18/commercial-property-finance-still-falling-cracks-south-africa/
Understanding how to make a business case to a lender is a challenge, especially for new commercial investors who may struggle with experience in how to approach the institutions and structure their investment case. In the case of commercial property, finance institutions are looking at income yields for the property, historical income statements as well as copies of leases and full due diligence supporting documents. They will need a property valuation and the investor may well have to sign personal surety if they are new. The banks will check everything.
For a development property, this becomes a lot more complicated as you need to have feasibility studies, market related information for demand etc.. to present your case.
As the article points out, banks themselves can be unhelpful and tend to be systems driven – so if the bank can’t assist, they may not point you in the right direction. When property investors are looking for finance the traditional banks may accidentally refer you to the wrong division. Ensure that you request somebody that specifically deals with commercial property finance when talking to your bank
When choosing a property, contact Commercial Exchange, +27 (011) 467 7870. With our experienced team and track record of success; we cut through the red tape and help you identify opportunities that others might not see. Not only will we help you identify a property to invest in, we may also be to assist with some of the criteria requested from you financier, and hold your hand through some of the process.