If you are considering to purchase an industrial property in Singapore, you may be wondering what is the maximum possible leverage you are able to get from the bank.
90% Loan is Possible
If you have an operating company with good company financials, certain bank may be able to grant you up to 90% loan if your intention is to purchase the industrial property for your own company use and not for rental income.
Lower Upfront Payment and Better Cash Flow
By opting for a 90% loan, your down payment amount for the industrial property will only be 10%. This allows for better cash flow and future expansion opportunities for your company. Furthermore, investment holding companies (IHC) are usually only able to take on up to 80% loan unlike operating companies and this 10% difference in down payment may be quite substantial depending on the unit sale price. By opting for a 90% loan, you may also be able to set aside more cash for the down payment of the next industrial property where your company can consider to purchase not 1 but multiple industrial properties if you wish to. You may also set aside some monies for Goods & Services Tax (GST) as most industrial properties are purchased using GST registered companies.
Maximum Loan Tenure
Depending on the remaining lease of the industrial property, your company may also be able to take on up to a 30 year loan depending on the remaining lease of the industrial property that your company is purchasing. Longer loan tenure also means lower monthly instalments and better cash flow for your business.
How to Go About Obtaining 90% Loan
If you are unsure and would like assistance on obtaining a loan for your industrial property purchase, you may reach out to us to know more about how your company can apply for up to a maximum of 90% loan and a longer loan tenure for better company cash flow. However, do be aware that it will still be subjected to the bank’s review and approval. It is always advisable to obtain an in principle approval (IPA) first before finalising on the industrial property purchase.