First commercial property... help

[Rocketjump]

So I own 2 residential properties, one I stay in one I rent out.

I’m looking at purchasing a commercial property, I made an offer and it has been accepted.

My company, a PTY Ltd, is in a super bad area so the plan is to move into the new property and the company will rent it from me.
And it will form part of my portfolio.

Now here is the catch, I can afford the property no problem and have all paperwork in place but two of the banks so far have told me I cannot finance a commercial property in my personal capacity it has to be through the business.

but this property is part of my personal investment portfolio and has nothing to do with my current business.

I’m seeing a few more people tomorrow to try and get it sorted it’s just super frustrating.

it’s not an expensive property,my affordability can prob qualify for twice the amount, I have a 40% deposit, it should be a straight forward process.

the offer to purchase was also signed in my personal capacity.

many thoughts or tips ?

 

[Grubscrew]

Best bet might be Standard Bank. But most banks don't allow you to use residential(home) loan options to buy commercial properties. Commercial\business loans are dealt with separate business units in the bank and also have different requirements as compared to the home loan departments. Also most commercial loans are max 10 years.

 

[Rocketjump]

Im aware of the 10 year and 40% deposit, all those boxes are ticked, its not an expensive property.

I will try standard bank tomorrow and see if I can find someone to help.

I just don't understand why I apparently can't buy a commercial property and get finance in my personal capacity it makes no sense to me

 

[Tomtomtom]

the plan is to move into the new property and the company will rent it from me.

I cannot finance a commercial property in my personal capacity it has to be through the business.

Just a guess but maybe you answered your own question? Your repayments depend on the business you are intending to rent to, which you also happen to control, so why is the loan not in the company's name and thus closer to the cash?

 

[Rocketjump]

But I intend to rent it out to any business later on, my business being there for now is just because it makes sense. But it is currently Rented out to a different business for 6months then my business will move in and then at a later stage I will rent it out to other businesses.

 

[rietrot]

Good luck. It would be really stupid if the banks don't help you in your personal capacity as you want as that is more secure for them. And many people opperate in their own capacity as a sole trader.
Giving you the loan under the business name and then having you sign a surety in any case is just unnecessary paperwork.

What might be happening here is just make sure you are talking to the correct people at the bank. Someone who actually do these commercial/business finance and not just a regular home loan consultant. It's normally separate. And a normal homeloan consultant will just frustrate you.

 

[jezzad]

Depends on who you speak to, most people at the bank will look at the paperwork and tick off the checklist. If something doesn’t tick off sorry no loan.

The maths doesn’t matter, we recently purchased a property with a 50% deposit and had to fight tooth and nail to finance the balance.