FNB advises on commercial property
With commercial property financing being one of the most frequent services customers have challenges with, the head of Commercial Property Finance at FNB Namibia, Axel Cramer recently advised that anyone who wants to apply for such a loan should know who to approach.
“The criteria for a loan will depend on who you approach. Do some research – websites are generally a good source – about who you can approach and what they expect from prospective lenders. Have your business plan ready and all the research you have done on the property you intend to buy. A lender will want you to convince them that this is a good investment, so compile the documents to this effect,” Cramer explained.
Cramer further explained that commercial property is any property that is legally zoned (permitted) to have a business conducted from it.
He noted that that it was not as difficult to find someone to back customers as it used to be, especially now that any bank or a financier that dealt with commercial property would be willing to look and listen.
“There are also various private and government-supported funds geared towards SMEs that may give you a loan. Have a look at our Finding Financing category for the names of organisations to approach. And – just like you would if you were buying a home, you can shop around and see which bank will give you the best interest rate,” Cramer said.
Cramer said that prospective customers should also know what costs would be included in the loan as most financier’s charge administration fees and VAT and it was important to find out if this would be part of the loan or have to be paid separately.
He added that there are always questions asked on whether there is a service provider that offers finance, brokering and management solutions all in one. According to Cramer, investments are structured using equity, shareholders’ loan accounts and term loans or any combination of these.
Meanwhile, he added, individual solutions are structured once the level of risk and the potential return investment of the venture have been assessed.
“As with any purchase of this kind, it’s important to get sound financial advice from an expert in this area. Before you even consider buying a property and approaching a financier for a loan, get a financial planner in conjunction with your property expert to look at your finances and determine whether it’s in your best interest (and the best interest of your business) to buy a property,” concluded Cramer.