For small businesses, acquiring commercial property—whether for expansion or a new venture—requires strategic planning. This is because buying commercial real estate often requires substantial capital, and not all business owners have the funds to pay upfront. In such cases, commercial property financing or business property loans provide a viable solution, allowing businesses to secure the necessary funding while still being able to manage cash flow.

What Is a Commercial Property Loan?

This type of financing is specifically designed for purchasing non-residential properties. Also known as business property loans, these loans apply to a wide range of commercial real estate, including:

Shophouses for business use or investment
Retail spaces (e.g., shopping malls, storefronts)
Office units (e.g., co-working spaces, corporate offices)
Warehouses and industrial properties

Key Features of Commercial Property Loans

Before securing financing for a commercial property, it’s essential to understand the key features that impact loan terms and repayment structures.

1. Types of Commercial Property Interest Rates

Commercial property loans offer two different types of interest rates, which are:

Floating Interest Rates – These rates are pegged to a benchmark, specifically the SORA (Singapore Overnight Rate Average), and fluctuate depending on Singapore’s economic conditions. During strong economic growth, interest rates typically rise, increasing borrowing costs. Conversely, when there are slowdowns, rates tend to decrease, making financing more affordable.
Fixed Interest Rates – As the name suggests, fixed rates remain constant for a specified period or the entire loan tenure. This provides predictability and stability, shielding you from market fluctuations. However, fixed-rate loans generally come with higher interest rates to compensate for the lender’s risk in case market rates drop.

2. Loan Tenure

Commercial property loans typically have shorter loan tenures compared to residential property loans. In fact, most lenders in Singapore offer loan terms of up to 25 to 30 years, but this will also depend on your financial profile and the purpose of the property.

3. LTV Limit

The LTV limit determines how much of the property’s value can be financed through a loan. While LTV limits vary based on the financial standing of the business and lender policies, you may be able to secure financing of up to 80% of the property’s value, depending on eligibility and risk assessment.

Factors Affecting Your Commercial Property Loan Rates

Lenders assess several factors when determining your loan-to-value (LTV) limit and other loan terms. These criteria help financial institutions evaluate the risks involved and set appropriate financing conditions. Common factors that influence your loan amount include:

Current market conditions – Economic trends and property market stability impact loan approvals and interest rates.
Perceived risks involved – Lenders assess factors such as business creditworthiness and financial stability.
Purpose of the property – Whether the property is for investment (rental income) or owner-occupation can affect loan terms.
Expected returns from the property – Projected rental yield or potential for capital appreciation plays a role in financing decisions.
Type, size, and location of the property – Prime locations and high-demand property types may secure better financing terms.

Tips for Securing the Best Commercial Property Loan

Getting a loan for a commercial property is a more tailored process compared to residential property loans. Unlike standard home loans, commercial property financing requires direct engagement with lenders to discuss the specifics of the transaction.

But generally, lenders will require documents related to the property type, loan amount, and your business’s financial profile.

How Much Loan Can You Take Out Under Cash Out Refinancing?

Securing the right commercial property financing requires careful planning and research. Some key strategies to improve your chances of getting the favourable loan terms include:

1. Evaluate Your Financial Standing

Before applying for a commercial property loan, assess your business’s financial health to determine how much financing you can realistically secure. Consider factors such as:

Credit history – A strong business credit profile increases your chances of approval and better loan terms.
Cash flow – Lenders evaluate your company’s cash flow to ensure you can meet monthly repayments.
Debt-to-income ratio – A lower ratio indicates financial stability, making you a lower-risk borrower.

2. Choose the Right Property

Selecting the right commercial property not only enhances your business operations but also increases the likelihood of loan approval. When you plan to buy a commercial property, you need to factor in the following:

Location – Ensure the property is easily accessible to customers, employees, and suppliers.
Business suitability – The space should align with your operational needs, whether it’s an office, retail store, or industrial facility.
Future expansion – Consider whether the property allows for business growth or potential renovations.

3. Compare Loan Products

Commercial property loans vary widely, so it’s essential to research and compare different options to find the best fit for your business. Consider key factors such as interest rates, loan tenure, and repayment terms to ensure the financing aligns with your financial standing and long-term goals. Taking the time to evaluate loan products can help you optimise costs and secure terms that support your business growth.

4. Work with Experts

Navigating commercial property financing can be complex due to varying lender requirements and loan structures. A loan broker in Singapore, such as professionals from Greystone Advisory, can provide:

Expert guidance – These professionals can help you understand eligibility requirements and loan options that align with your business needs.
Access to better loan deals – Brokers have relationships with multiple lenders, allowing them to negotiate more competitive rates for your business.
Time savings – They can help you with paperwork, lender discussions, loan structuring, and streamlining the application process.

Let Greystone Advisory Help You Secure Financing for a Commercial Property

While finding and securing commercial property financing for your small business can be complex, you don’t have to do it alone. At Greystone Advisory, our consultants can guide you through the loan process and help you identify what type of financing would best suit your business’s needs and financial profile. We take the time to assess your needs, ensuring you receive a loan structure that supports your long-term business goals.

With our industry expertise and strong relationships with private lenders, we can help narrow down private property loan products, negotiate competitive interest rates, and streamline the application process. Whether you’re purchasing an office space, retail unit, or industrial property, our team is committed to helping you secure financing with confidence.

For more insights into securing alternative financing, check out our guide into options for bad credit mortgage seekers and what private lenders are.

Situation 1	BANK’S REPOSSESSION
Deal Type	Refinancing with Fresh Cash-Out
Property	3 Bedroom Condo along Meyer Road
Property Value	$3.2M
New Loan Amount	$2.4M (with fresh cash-out of $500K)
LTV	75%
Synopsis	Customer, age 51, a senior marketing director in the food logistics industry, was being retrenched in August last year without any prior notice. With his wife being a full-time homemaker, he found himself soon having difficulties in servicing his mortgage repayments, resulting in the bank taking steps to repossess the property for a mortgagee sale within a short span of 6 months. Despite only having a $1.4M outstanding mortgage with $600K of CPF usage, the bank was unable to grant him additional cash-out facilities to tide him through this challenging period, as he couldn’t pass the 55% TDSR threshold in the absence of regular reported income.
Solution (1)	Luckily, the customer managed to find us in time and we eventually saved his house from being repossessed. Arranged our private property lender to grant a $2.4M mortgage loan, out of which $1.4M to redeem his existing mortgage, $600K to refund to CPF with remaining $400K fresh term loan for his personal use, which includes servicing of the monthly instalments with the new private lender.
Solution (2)	The customer managed to find a new employment sometime in March this year. We had since successfully helped the customer to refinance the $2.4M from the private lender sometime in September this year.

Situation 3	INHERITANCE DISPUTES
Deal Type	To finance purchase of sibling’s share in the property
Property	Sem-Detached house along Jalan Seaview
Property Value	$$7.5M
New Loan Amount	$2.8M
LTV	37.5%
Synopsis	Customer, age 62, had jointly inherited the above fully-paid property together with his sister when their father passed away sometime in June last year. Both siblings were at constant disagreements regarding the sale of the property. Customer had always wanted to keep the property for future capital appreciation and his sister was in favour of selling the property so that she could use the sales proceeds to fund her new condo purchase.
Solution (1)	Unable to reach a consensus, the Customer then wanted to buy over his sister 50% equity stakes in the property (valued at $3.75M). Customer was unable get the bank to finance his part purchase exercise as he cannot meet the TDSR requirement and loan tenure. We then managed to get our private lender to finance his purchase of his sister’s share with a $2.8M loan (with a 75% LTV against the $3.75M purchase price)
Solution (2)	Separate financing had also been arranged for the remaining $950K cash difference (being the balance of the remaining 25% purchase price), which was secured by pledging part of Customer’s 50% stakes in the property as well.

Situation 2	BANKRUPTCY LAWSUIT
Deal Type	Refinancing with Fresh Cash-Out
Property Type	Detached House in Newton Area
Property Value	$14M
New Loan Amount	$10M
LTV	71.4%
Synopsis	Customer, age 72, was facing one of the biggest challenges as a veteran businessman, when one of his suppliers had filed a bankruptcy application against him (being the guarantor for his group of F&B companies). After successfully obtained the court judgement for a claim-sum of $1.9M, the customer was eventually given 2-month timeline to settle the payment, failing which he would be in imminent danger of being declared a bankrupt, thus crumbling his business empire which he had built for decades. Despite only having an outstanding mortgage of $7.5M (with a 53.5% LTV against its $14M valuation), no bank is willing to explore the fresh financing in view of his age and more importantly, the pending bankruptcy lawsuit.
Solution	Secured a $10M financing (@ 71.4% LTV from a non-bank lender, out of which $8.5M was to redeem his existing bank loan with another $1.9M to be earmarked to be paid to the supplier on the agreed deadline. Remaining $600K was disbursed to the Borrower for his personal use. With the payment made to the supplier and eventual complete withdrawal of the bankruptcy application, we have thus successfully helped our customer to avert the disaster of being made a bankrupt at this age and he can now refocus on rebuilding and restructuring his other business portfolio

Challenge 6	MULTI-PROPERTIES OWNER
Deal Type	Refinancing (with fresh cash-out)
Property	Good Class Bungalow (“GCB”) in Holland vicinity
Property Value	$70M
Existing Mortgage	$28M
New Loan Amount	$50M (with fresh $22M cash-out)
LTV	71.4%
Synopsis	At the age of 60, our borrower stood as a seasoned property investor with a remarkable portfolio of prestigious GCBs and luxurious Sentosa Bungalows. His journey was a testament to years of astute investment decisions. However, even a seasoned investor can face hurdles. Despite his impressive corporate and professional profile, the ever-evolving TDSR regulations had cast a shadow over his aspirations for further financial growth. His own bank had to adhere to these stringent regulations, leaving him unable to access additional facilities.
Solution	With determination and creativity, we set out to secure a $50 million mortgage loan from a non-bank lender. What made this solution stand out was the 18-month interest servicing repayment plan. Now equipped with fresh capital, our borrower could breathe new life into his retail business, expanding it like never before with a $22 million cash-out facility. But our assistance didn’t stop there. We successfully guided the borrower in refinancing the mortgage loan back to a local private bank just nine months after the initial disbursement. This win is a narrative of resilience and adaptability.

Challenge 3	POOR CREDIT GRADING
Deal Type	Refinancing with Fresh Cash-Out
Property	Bungalow in Katong
Property Value	$9M
Existing Loan	$5M
New Loan Amount	$7.5M (with fresh $2.5M Cash-Out)
LTV	83.3%
Synopsis	At 62 years old, our customer faced a roadblock. His aspirations for additional mortgage financing hit a snag as his bank hesitated due to both his age and an unfavorable “HH” credit bureau rating. This rating was a result of overdue credit card facilities amounting to a hefty $1.2 million.
Solution	With a determined spirit, we sought out an alternative path. Through our network of non-bank lenders, we secured a remarkable $7.5 million term loan facility. It was not just a financial transaction; it was a lifeline. The first step was to use $2.5 million of this fresh term loan to clear off the burdensome $1.2 million in overdue credit card facilities. It was a moment of relief, a chance to leave the past behind. But that was not all. The remaining funds were now at our customer’s disposal for personal investments, a fresh start to chase new dreams. This story encapsulates our commitment to finding solutions when doors seem closed. .