Commercial Guide
Commercial Financing Basics
Commercial property financing runs on different rules from a residential mortgage — different loan-to-value limits, no CPF, and often an entity-based assessment rather than a personal one.
Reviewed by Glenice Toh
How Commercial Financing Differs From Residential
Where Commercial Financing Diverges
- Loan-to-value limits and assessment criteria for commercial property are generally different from residential mortgages, and vary by lender.
- CPF savings cannot be used to service or fund a commercial property purchase, unlike residential property.
- Loan tenures for commercial property are often shorter than the maximum available for residential mortgages.
- Buying under a company shifts the credit assessment toward the entity's financial standing, directors' guarantees and business track record, rather than solely personal income.
Personal Purchase vs Buying Under A Company
Buying commercial property in your own name is assessed more like an individual mortgage application. Buying under a company changes the picture — lenders look at the company's financials, and directors are often required to provide personal guarantees, which carries its own risk if the business underperforms.
Where Buyers Get Commercial Financing Wrong
Frequently Asked Questions
Frequently Asked Questions
How does commercial property financing differ from residential?
Loan-to-value limits, assessment criteria and interest structures are generally different from residential mortgages.
Can I use CPF for a commercial property purchase?
No, CPF savings cannot be used to finance a commercial property purchase.
Does buying under a company change what's assessed?
Yes — lenders generally assess the company's financials and may require directors' personal guarantees, rather than assessing solely on personal income.
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Personal versus entity purchase changes what's assessed and how much guarantee exposure you're taking on. Get this clear before you commit to a unit.
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