Can I Secure a Loan to Buy a Warehouse? 

Investors eyeing warehouses for stable income can secure loans. Approval depends on building nature and location. 

Loan Details: 

• Borrow up to 70% of warehouse property value (freehold), 100% with guarantor or residential property security. 
• Commercial showroom: Borrow 70%-75% (freehold). 
• Storage unit: Borrow 70%-75% (freehold), leasehold case by case. 
• Maximum loan term: 20 years. 
• Maximum interest-only term: 5 years. 
• Loans over $5,000,000 assessed case by case. 
• Business plan required for running a business in the warehouse. 
• Interest-only and principal & interest payments available. 
• Low doc options available. 

What Do Banks Assess? 

Warehouses are considered standard commercial properties, making approval relatively straightforward. Commercial lenders often require 1.1 to 1.4 times income to proposed interest expenses. 

• Credit history: Detailed explanations for credit issues considered. 
• Freehold purchase: Banks assess ability to repay based on asset position, stable income, and residential property. 
• Business owners: Financial statements, BAS, ATO tax portal printout, or bank statements required. 
• Business plan: Necessary for business expansion in the warehouse. 

Does Warehouse Location Matter? 

Location is crucial for attracting tenants and affects property value. Proximity to CBDs, good infrastructure, and low vacancy rates are desirable. 

Can Direct Competition Affect Loan Approval? 

Direct competition, especially in retail, can impact business and loan approval, particularly for logistics companies. 

How Are Warehouses Valued? 

Lenders assess structural elements, attractiveness to tenants, transport links, and business presence around the property. Mixed-use and specialty properties may affect valuation. 

How Is Business Assessed? 

Similar to home loans, commercial loan applications focus on borrower strength. A SWOT analysis considers strengths, weaknesses, opportunities, and threats. 

What Security Can I Use? 

• Development: Registered first mortgage, General Security Agreement, directors’/shareholders’ guarantees. 
• Investment: Registered first mortgage/s, General Security Agreement, directors’/shareholders’ guarantee. 

Get Proper Financial Advice 

Consulting accountants, financial advisers, and lawyers before applying for a warehouse loan is crucial for avoiding common mistakes. 

How Will You Own the Warehouse? 

An accountant can help set up a profitable entity structure. Seek advice before making decisions. 

How Do You Know You’re Getting a Good Deal? 

Specialist solicitors and business brokers assist in negotiating favorable terms and agreements. 

What to Look for in the Property? 

Consider land area, clearance height, loading docks, office space, and security features. Evaluate potential for renovations and repairs. 

Benefits of Buying a Warehouse for Business? 

• Fixed costs: Certainty with long-term commercial loans. 
• Tax benefits: Deductions for owning, running, and maintaining business space. 
• Generate rental income: Rent out excess space for additional income. 
• Freedom for improvements: Control over property modifications. 

Will the Warehouse Support Your Business? 

Consider location, zoning, nearby infrastructure, necessary permits, and the type of storage needed. Evaluate the property’s compatibility with your business. 

Types of Warehouses: 

Explore various warehouse types, including manufacturing, distribution centers, automated warehouses, and climate-controlled facilities. 

E-commerce Impact on Warehouses: 

The rise of e-commerce increases demand for warehouses and industrial storage. Internet-based stores still require physical spaces for goods storage. 

Conclusion: 

Buying a warehouse involves careful considerations of location, loan details, property features, and business needs. Seeking professional advice is crucial for a successful investment.