Extending your operations will help grow your business. You need more capital to acquire or rent a bigger building to accommodate your new machines, equipment, and extra workers. You may have to ask a bank for a loan, for it is difficult to organize such a large sum of money by yourself.
Most banks offer a business property loan, a kind of credit extended to small and medium-sized enterprises to develop their business. They offer these loans at fixed or adjustable interest rates.
Nevertheless, the process of a business property loan is different from that of a residential property loan. Commercial real estate loans are fixed-rate or floating-rate interest loans, just like residential property loans.
Who May Need a Commercial Property Loan in Singapore?
Unlike home purchases, which frequently involve accommodating personal preferences, purchasing commercial property is purely based on your business. For this reason, if you plan to buy as an owner-occupier, it is crucial to conduct extensive research on the real estate market, and the type of property and site that is best suits your company’s standards.
Some prime reasons for purchasing business property in Singapore are:
- As an Investor
Investors purchase commercial real estate to rent it out and possibly sell it back later for a profit. Instead of living in the properties, investors rent out to other people or businesses.
Institutions or private parties make investments in commercial property. Institutional investors, including banks, insurance agencies, and hedge funds, usually purchase commercial properties through agents. Individual investors buy commercial real estate for their accounts or businesses to generate investment gains.
- As an Owner-Occupier
Owner-occupiers are people who invest in commercial real estate to run their businesses or for personal use. As an illustration, a business owner who purchases real estate to provide office space for their company would be considered an owner-occupier. Commercial property owners do not benefit from reduced property tax rates, in contrast to homeowners.
Owner-occupiers frequently take extra care to choose properties with settings and construction types that are better suited to their commercial requirements. For instance, whether prospective employees are ready to go to the location will depend on factors like the location’s accessibility and the structure’s appearance.
To tailor the business property to the company’s specific requirements, owner-occupants may also want to have the option to start from scratch or carry out extensive renovations. Be prepared to submit your plans to the bank because these elements might have an impact on your loan for commercial real estate.
- Application Check List
If you are a DBS bank account holder and your business is not required to provide financial records. With ACRA or MyInfo Business, DBS Bank will retrieve all the necessary information. However, you may have to give extra details depending on the circumstances.
- Additional information you may need to prepare includes:
- Address, floorplan, and real estate tenure
- Cost or appraisal of a property
- If offered, the choice to buy
- Most recent two-year financial reports
- Most recent three-month bank statements
- Not necessary if DBS serves as your primary operating bank
- The Process
- Online application submission: Check out this application checklist for any supporting documents you might need to get ready.
- Guarantors should be informed of your application: To get approval for your application, the bank will email your guarantor.
- Our relationship manager will contact you: The Bank’s consultant will get in touch with you after receiving your application and make you a conditional offer.
- Check the status of your application: You’ll also get instructions regarding how to check for application updates in an email after you submit your application.
- Review the offer before executing the contract: You’ll get the new and final offer for your approval once everything is in order.
Secure a Singapore business property loan for a predictable monthly repayment schedule, to avoid unexpected interest rate fluctuations. Consult a financial advisor for personalized advice and make decisions based on your personal needs and objectives.