07 June 2024

(2024 Guide) SME Business Owners' Guide to Commercial Property Loans

Are you an SME business owner dreaming of expanding your enterprise with new premises, or growing your investment portfolio? A Commercial Property Loan can be the key to unlocking your business goals.
 

With complex terms and varying interest rates, it can be difficult to navigate this process. At RHB, we understand the needs of businesses and offer flexible financing solutions to fuel your growth journey. We are here to guide you through the process and help you seize opportunities for growth.

Perks of RHB’s Commercial Property Loan

• Gain access to financing solutions for all types of commercial and industrial properties
   
• Enjoy flexible repayment periods extending up to 25 years
   
• Secure a high loan quantum of up to 80% of valuation
   
• Benefit from customised packages tailored for different property types and financing purposes

What is a Commercial Property Loan?

A commercial property loan is a type of financing offered by banks to businesses to help purchase commercial or industrial properties.  

As an SME business owner, commercial property loans can be leveraged for acquiring properties such as offices or rental spaces. These loans, secured by the property, allow you to spread out the cost of purchasing a property over time, providing flexibility in repayment terms. Whether you are looking to expand your business or build a property portfolio, RHB’s commercial property loans can help you achieve your financial goals. 

Read more:
●    Small Business Loans in Singapore
 

Common Terms in Commercial Property Loans

Before embarking on your application process, it is essential to familiarise yourself with these key terms that play a crucial role in shaping your loan agreement and repayment structure:

• Lock-in period: This is a fixed period where you would have to pay a monthly loan instalment comprising both principal amount and interest on the commercial property loan.
   
• Loan tenure: This refers to the total duration within which you repay your loan. It is the number of years over which you will be making monthly payments.
   
• Singapore overnight rate average (SORA): SORA is defined as the volume-weighted average rate of borrowing transactions in the unsecured overnight interbank SGD cash market. It might sound complicated, but essentially, it refers to a benchmark interest rate regulated by the Monetary Authority of Singapore (MAS), which can impact your business property loan rate.
   
• Total Debt Servicing Ratio (TDSR): The TDSR refers to the maximum proportion of an individual's gross monthly income that can go towards repaying all monthly debt obligations. This ratio is used to assess how much an individual is allowed to borrow, and is used when applying for loans as sole proprietors. TDSR, however, does not apply to loans for companies, as they are subject to a different set of credit assessment criteria. 

Who Can Benefit from Commercial Property Loans?

Various packages and interest rates may be available to your business, based on the purpose of financing the property (purchase of completed property, property construction financing, property as collateral). To learn more, we recommend that you speak with a professional.

Finance Your Commercial Property Today

Benefits of RHB’s Commercial Property Loan:

• Flexible repayment terms: We understand that businesses have long-term needs. Our commercial property loans offer flexible repayment periods that can be extended up to 25 years.
   
• High loan quantum: We can finance up to 80% of the property’s valuation, providing you with substantial capital to fuel your ambitions.
   
• Attractive interest rates: Enjoy competitive interest rates that fit your budget and financial goals.
   
• Tailored packages: Our loan solutions are not one-size-fits-all. We work with you to understand your specific needs and create a financing package that aligns with your business priorities.

Ready to unlock the potential of your business with a commercial property loan? Here is how to get started:

Use our Commercial Property Loan Calculator to estimate the total interest and potential monthly instalment for your loan.

At RHB, we are committed to being your partner in business success. Speak with our Relationship Manager today and let us explore how a commercial property loan can propel your business to new heights.
 

The information presented in this article is accurate as of date of publication.